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Bumper paddy harvest but farmers left in the lurch
Fears of an escalation in rice prices as the Avurudu season approaches have been dispelled by the abundance of the Maha harvest this year, officials said.
“Around 700,000 hectares of paddy fields have yielded a bountiful harvest this Maha season,” Duminda Priyadarshana, Senior Research Officer at the Hector Kobbekaduwa Agrarian Research and Training Institute (HARTI) said.
According to statistics of the Agriculture Department, this year’s Maha season is expected to produce over 300,000 metric tonnes of paddy.
Mr. Priyadarshana attributed the speculation regarding a price increase, to the absence of a harvesting season from October last year until the first few weeks of January.
“It was the remaining stock of the Yala season -which generally yields 35% of the annual harvest, which was sold during the last few months” he remarked.
“From this week onwards, the prices of rice –especially the Nadu variety, will decrease by between Rs 5/- and Rs 10/-” the senior research officer said while ruling out all possibilities of a price increase commencing next week until the end of March.
Nadu rice which was priced between Rs 100/- and Rs 105/- a kg in October, has been reduced by around Rs 10 while Samba rice which stood between Rs 118 and Rs 120 has dropped by approximately Rs 8/- a kg, dismissing fears of a price escalation.
“Samba costs more than Nadu because of the demand for this variety of rice. Residents in Colombo, Gampaha, and Kalutara opt for Samba although 75% of people across the country consume the Nadu variety of rice” the HARTI official said.
A leading private rice miller also told the Sunday Times that the prices of rice will drop by between Rs 10 and Rs 12 from February onwards due to the abundance of rice resulting from a bountiful harvest.
Farmers Association leader Namal Karunaratne, said despite claims that the price of rice will be lowered, the reality is that the rice industry is presently controlled by approximately four leading rice millers in Polonnaruwa.
“The price of rice could be lowered even further, if this rice mafia did not exist” Karunaratna told the Sunday Times.
He alleged that small rice millers are forced to shut down their businesses since these leading millers purchase the entire harvest at very low price from farmers and store it. This enables them to control the prices of rice in the market he said.
“The government too, doesn’t have sufficient stocks of rice” Karunaratne said.
The Farmer’s Association leader then explained that leading rice millers purchase paddy at about Rs 30/- per kg from farmers. The process of milling rice, costs around Rs 20/- including labour cost, he said.
“A kg of rice could be sold at just over Rs 50/- with a reasonable margin of profit. However, rice is sold at prices exceeding Rs 90/- or Rs 100/- per kg” he said.
S. Thilakasiri, 54, who owns 3 acres of paddy land in Galenbindunuwewa, Anuradhapura also told the Sunday Times that certain leading rice millers had purchased his entire stock of paddy.
He said that the millers purchased a kg of paddy at around Rs 30/-, but sell the finished product to consumers at an extremely high prices.
Farmers are prepared to sell their produce directly to consumers he said, but do not have the facilities to store stocks over a long period of time.
It is because of this he said, farmers are forced to sell their produce to rice millers.
Earlier this week, Cabinet approved the allocation of a sum of Rs 6,100 million to the Paddy Purchasing Board to purchase stocks of paddy from farmers during the Maha harvesting season which is currently underway.
Susantha Kumara Navaratne, the Vice President of the All-Island Farmers Federation told the Sunday Times that government has imposed a floor price of Rs 38/- for the purchase of a kg of Nadu paddy from farmers and Rs 41/- per kg when purchasing Samba paddy, .
Further, the Cabinet Paper put forward by Agriculture Minister P. Harrison also stated that the government would purchase 2,000 kg of paddy from each farmer.
However, government has not opened its paddy storage facilities as yet and are not in a position to purchase the harvest.
As a result farmers have no option but to sell their produce to the paddy millers at lower prices enabling the millers to earn a huge profit Navaratne added.