the “rice monopoly”, a danger for farmers and consumers

The government has not taken any measures on production so far. Help is needed to lower prices and meet the needs of families, who spend an average of almost $374 on food. Internal capacity must be increased to meet needs. Currently there is a monopoly in the hands of a few private mill owners, linked to prominent politicians.

Colombo () – In Sri Lanka, the threat of a “rice monopoly” is becoming more and more concrete, a danger for farmers and consumers, while the government seems to snub the emergency and has so far not taken any measures to at least control the 10% of the annual production of the country’s fields. Currently, most households on the island allocate around 75% of their income to purchasing essential foods and per capita consumption of rice is around 125 kg annually.

In 2023, 28,380 tons of rice were imported, at a cost of 6,091 million rupees (just under 19 million euros). In the past, all governments in power have focused on providing farmworkers with subsidized fertilizers and pesticides, waiving loans to farmers, and ensuring better prices for agricultural products, including rice, the staple food of Sri Lankans. .

The production cost of a kilogram of rice, which includes expenses such as machinery, electricity, labor and distribution, is about 25 rupees (just under 8 euro cents). Given the government-guaranteed price of 100 rupees per kg (0.31 euro cents), rice can be sold to consumers at 160-175 rupees per kg (about 0.50 euro cents). Currently, however, 1 kg of rice sells for 220 rupees (0.68 euro cents). Keeping this in mind, the government should intervene: if aid were granted, rice could be sold to consumers at Rs 150-160 per kg. Till date, the Food Department is non-functional, cooperative societies are defunct and the Rice Marketing Board has become a slow and ineffective institution. Owners of large mills make exorbitant profits during adverse weather conditions, including floods and drought.

According to former Director of Agriculture, KB Gunaratne, “given that the per capita consumption of rice in Sri Lanka is about 125 kg per year, an additional 200,000 tonnes per month need to be produced to achieve this target, a total of 2.4 million tons per year. According to the expert’s assessment, to increase production in rice fields, around 1.3 million hectares would have to be cultivated each year during the Yala (May to August) and Maha (September to March) seasons. Currently about 3.53 million tons are produced, but this would not be enough to cover needs. In the past, Sri Lanka was self-sufficient between 2010 and 2013, but since then it has not been self-sufficient.

Interviewed by , farmers Haramanis Appuhamy (53 years old), WM Siriyalatha (42) and Punchi banda Wijepala (38) from the Polonnaruwa district, in the Central-North province, the “rice bowl” of Sri Lanka, explain: “To supply rice at a subsidized price, the Government could provide transport facilities for rice distribution and facilitate the establishment of paddy fields in major producing districts such as Ampara, Batticaloa, Anuradhapura, Polonnaruwa, Kurunegala, Hambantota and zones B, C, L and M for Mahaweli.

Economists Dayantha Mendis and Sudesh Mayadunne warn that “the so-called “rice monopoly” could be ended if the government took steps to control at least 10% of the country’s annual production. Today, the monopoly is in the hands of a few private mill owners closely linked to prominent politicians. As a consequence, rice growers and consumers feel helpless in the face of this situation.

According to a recent joint survey by the World Food Program (WFP), the number of food-insecure households in Sri Lanka increased from 17% to 24% in six months. This percentage includes 51% of households in the housing sector, 51% in rural areas and 15% in urban areas. Some households now spend 75% of their income on basic foods. According to government statistics, a family of four needs 120 thousand rupees per month (about 374 euros) to feed themselves.