Government’s Rice Import Decision Sparks Debate amid Surplus Projections

• 5opn1
• December 7, 2024
• Business News
• Government’s Rice Import Decision Sparks Debate amid Surplus Projections
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Behind the News

The Sri Lankan government has controversially decided to import rice, citing hoarding by traders and soaring market prices. However, this decision has drawn criticism from farmers and experts who argue that the country already has sufficient rice supplies to meet local demand.

According to the Department of Agriculture, Sri Lanka’s minor Yala season is expected to produce 2.02 million metric tonnes of paddy, cultivated on 488,957 hectares by the end of August. This projection surpasses the earlier estimate of 1.77 million metric tonnes in July.

After accounting for 80,000 metric tonnes of seed paddy and 120,000 metric tonnes of wastage, approximately 1.82 million metric tonnes of paddy will remain for milling. This will yield about 1.24 million metric tonnes of rice for consumption.

In the main Maha season, which ends in March, Sri Lanka harvested 2.42 million metric tonnes of paddy. Combined with the Yala season, the total annual production is expected to reach 4.24 million metric tonnes of paddy, equivalent to 2.88 million metric tonnes of rice.

With current consumption trends, this creates a surplus of approximately 420,000 metric tonnes for the year. Despite this, Sri Lanka’s high rice prices and non-export grade quality due to years of trade protectionism have limited export opportunities.

Criticism from Experts and Farmers

Experts, including senior researcher Duminda Priyadarshana from the Hector Kobbekaduwa Agrarian Research and Training Institute, have questioned the need for rice imports. Priyadarshana believes crop damage from adverse weather conditions has been overstated and does not justify the decision. He predicts that the Maha season, which typically accounts for 65% of annual rice production, will yield sufficient rice to meet local demand for at least seven months.

Farmers in the Walawa region, who supported the current government, expressed disappointment with its decision-making. They noted that short-term price increases often occur between the Yala and Maha harvests but are usually corrected when the Maha harvest enters the market early the following year. Farmers argue that the government should adopt a balanced approach to stabilize prices without undermining local production.

Despite reports of crop damage, recent rains have replenished water reservoirs across rice-growing regions, creating favorable conditions for the Maha season. Priyadarshana highlighted that even in a worst-case scenario, with 400,000 acres of damage, 80% of production would still suffice to meet demand for seven months. Additionally, replanting damaged areas could further mitigate losses, a practice seen in previous seasons.

Concerns over Imports

Farmers and experts worry that rice imports could destabilize the local market. Uncontrolled imports risk reducing demand for Maha season rice, allowing large-scale millers to buy local harvests at low prices, potentially exacerbating existing issues such as price manipulation by the “rice miller mafia.” These practices could harm farmers and damage the government’s reputation.

Recommendations

To address the situation, experts suggest the government focus on:

Conducting accurate assessments of crop damage and Maha season yields.

Restricting imports to prevent oversupply and protect local farmers.

Balancing policies to benefit farmers, producers, and consumers while ensuring food security.

In conclusion, critics believe the government’s decision to import rice is premature and unnecessary. By efficiently managing local production and tackling systemic challenges in the rice industry, Sri Lanka can ensure stable rice prices without resorting to imports.