Government Overhauls PMB to Stabilise Rice Market and Support Farmers
- 5opn1
- December 11, 2024
- News
- Government Overhauls PMB to Stabilise Rice Market and Support Farmers
- 0 Comments
Behind the News
Sri Lanka is set to restructure the Paddy Marketing Board to extend more support to farmers and stabilise rice prices in the face of prevailing market challenges.
The board, hitherto relatively dormant, owing state banks Rs. 28 billion, will now be involved in direct purchase of paddy from farmers at guaranteed prices, removing the inefficiencies and manipulative aspects in the market.
President Anura Kumara Dissanayake has instructed officials to strengthen the PMB, refurbish paddy storage facilities and involve small-scale millers in rice production.
The government also plans to cultivate 1.3 million hectares of land during the Yala and Maha seasons to increase annual rice production.
These measures are intended to stabilise the market by eliminating superfluous profits of large mill owners, thereby assuring remunerative prices for the farmer and affordable prices for the consumer.
The board, which had been largely inactive and owed state banks Rs. 28 billion, will now focus on purchasing paddy directly from farmers at guaranteed prices, addressing inefficiencies and curbing market manipulation.
The President has instructed officials to strengthen the PMB, refurbish paddy storage facilities, and involve small-scale millers in rice production.
The government is also planning to cultivate 1.3 million hectares in the Yala and Maha seasons to increase annual rice production.
But despite all these efforts, the hiccups persist because of inefficiencies within the Food Department, cooperative societies, and even the PMB itself.
Therefore the government is to purchase 300,000–400,000 metric tonnes of paddy in the 2024-25 Maha season for processing and distributing through cooperative stores such as Sathosa.
This move seeks to break the oligopoly of the large-scale rice millers accused of artificially inflating prices. While Sri Lankans consume 6,500 metric tonnes of rice per day, the recent effort by PMB saw it purchasing only 119 metric tonnes of Keeri Samba rice last season.
Renovation of PMB warehouses can also increase their storage capacity two-fold up to 400,000 metric tonnes and streamline the paddy stock better.
Agriculture Ministry Secretary M.P.N.M. Wickramasinghe blamed market manipulation as the real reason for rice shortages, rather than actual supply problems. Although there is price control, farmers are unable to sell their paddy – thus an imbalance in the market.
The government has decided to import 70,000 metric tonnes of Nadu rice through state-run agencies like Sathosa and the State Trading Corporation (STC) in order to meet the immediate shortages.
These imports, priced at Rs. 220 per kilogram or below, would start from December 15, said Trade Minister Wasantha Samarasinghe.
While Sri Lanka produces 3.53 million metric tonnes annually, the supply becomes scarce due to unaccounted surpluses and diversion of rice to industrial use such as for arrack production.
Annual consumption stands at 2.4 million metric tonnes with a monthly production of 200,000 metric tonnes he added.
The rice production cost is Rs. 25 a kilogram and is being retailed at Rs. 220. Government’s intervention can bring the prices down to Rs. 150–160 per kg.
Medium and small-scale millers, burdened with debt and closures, said that the re-activation of PMB was vital, their association’s president P.K Semasinghe said.
With almost 10,000 mills closed during the past ten years, only 700 are left operational. He further said that the PMB can streamline the prices by buying paddy and selling it to small millers so rice can be sold at below Rs. 220 per kg. This will save both producers and consumers from market fluctuation.
