Plight of paddy farmer: From quick fixes to lasting solution - II


by Professor Ranjith Senaratne,
University of Ruhuna (
(Part I appeared on Saturday)

With the advent of the open economic policies in 1978, however, the PMB had to compete against private sector mill owners; and the then Government promoted private sector intervention in the purchase and processing of paddy which gradually smothered the PMB. Therefore the crisis of paddy farmer started in 1980’s. As revealed by the then Agriculture and Agrarian Services Minister Maithripala Sirisena, during the height of Bheeshana (terror), i.e. from 1987-1989, the JVP burnt down 245 out of 545 agrarian service centres in the country along with paddy stocks and storage facilities.

In 2002/2003, the UNP government closed down the PMB and sold its assets to the private sector placing the paddy farmer at the mercy of rapacious private mill owners. The current marketing problem faced by paddy farmer is mainly due to emasculation of the PMB. When the SLFP-led government came to power in 2005, it re-established the PMB. However, neither it nor subsequent Governments paid adequate attention to developing the PMB into a strong institution equipped with modern facilities and spacious warehouses. Consequently a handful of private mill owners who are politically well connected have emerged to dominate the paddy trade in the country. It is well known that they manipulate the entire paddy industry, and have stifled over 300 cooperative societies and around 7,000 small-scale paddy mills that had been active in purchasing and milling paddy. Therefore it is of utmost importance to rescue the paddy industry from the tenacious grip of the rice mill mafia as a prerequisite to grant redress to the paddy farmer. How to break the monopoly of rice mill mafia?

It is certainly a daunting task and a formidable challenge which has to be met in the interest of the country. Given the strong nexus and high-handed way of operation of the rice mill mafia and their strong political connections, proactive involvement of the Government at the highest level is an absolute necessity, which is, of course, consistent with the much lauded Yahapalanaya (good governance) of the present government. If the government has a genuine commitment to national food security, this matter should be accorded top priority and addressed as a matter of utmost urgency. Moreover, professional bodies and intellectuals in the country should contribute to creating public awareness of this issue and developing a vibrant public voice against the mafia. They should serve as a powerful pressure group and guiding force for the Government.

Unfortunately, in our country, farmers’ organizations are weak and their voices feeble. Therefore despite their street protests and sit-ins, they have not made an impact.

It should, however, be stated that Mr. Namal Karunaratne, National Organizer of All Ceylon Farmers’ Federation and some regional farmers’ organization have been active and vocal in ventilating the grievances of the paddy farmer, although their voice has yet to be heeded by the policy makers or Government. In contrast, in many parts of the world, farmers’ organizations are very powerful and their voice cannot be lightly dismissed as they are a force to be reckoned with. They play a key role in shaping relevant national policies, and have a stake in import policies affecting local agriculture. Their representatives serve on high-powered committees that decide on agricultural imports including what, when and how much, so that the local farmer and national food security shall not be compromised. The section that follows illustrates how the recent indiscriminate price reduction of wheat by the Government has dealt a blow to the local paddy industry. Therefore we need to strengthen and empower farmers’ associations; and the professionals and intellectuals have a moral obligation and a major role to play in this regard, which they should fulfill without delay. It is needless to add that for any crusade to be effective and impactful, media support is crucial. As this is a cause advancing national interest/food security, our print and electronic media have a pivotal role to play and should be engaged to meet the challenge.

Furthermore, it is crucially important to strengthen existing cooperative societies and establish new ones as necessary and provide them with the necessary financial assistance for infrastructural development, competency building and capacity enhancement in regard to purchasing, milling, storage and selling of paddy and rice. It will also be useful to revitalize the small-scale rice mills that have been smothered by the rice mill mafia. If what is stated above is pursued in earnest with the unqualified support and unalloyed blessings of the Government and senior officials of the relevant public sector institutions, the paddy farmer would soon be freed from the clutches of unscrupulous paddy traders.

Lack of a consistent policy on pricing of wheat flour As stated before, Sri Lanka annually imports over one million tonnes of wheat costing Rs.40 - 45 billion of which part is re-exported to Singapore, Thailand, Korea and Indonesia. Thus, local consumption is about 750,000 – 850,000 tonnes of which around 330,000 tonnes is for bread (40 - 44%) and the rest, wheat-based products. We consume around two million loaves of bread (900,000 kg) and 1,300,000 kg of wheat-based products including buns, pastry, cakes, biscuits, kottu, roti and similar food products per day; that amounts to a whopping 2.2 million kg of wheat per day. Therefore if wheat is partly replaced by rice flour, a considerable saving of foreign exchange would result, which is of prime importance in the face of the worsening trade deficit which is currently at around US$ 8 billion per year. In addition, this could considerably reduce the problem of prolonged "stagnation" in go-downs of paddy awaiting milling, thereby easing the chronic marketing problem of the paddy farmer.

Some entrepreneurs in Sri Lanka such as Bandara Industrial Service (Pvt.) Ltd. have introduced a special finely ground rice flour to the market, which is usable for the above mentioned bakery and other food products. However, to promote rice-based products, the price of wheat flour should be maintained higher than that of rice flour, whose supply has to be ensured through a consistent national policy on food security. However, for political expediency politicians have been lowering of the price of wheat flour just before elections as a popular vote grabbing tactic, but much to detriment of the paddy farmer and rice-based industries in particular and the national interests in general. The most recent example is the lowering of the price of wheat flour by Rs. 12.50 per kg by the mini-budget presented by the present Government in January, 2015. That dealt a crippling blow to the emerging rice-based food industries in Sri Lanka that had invested a heavy capital. Now their products are not moving due to not being competitive, thus those industries/SMEs are in dire straits. Besides, it has affected the quantum of rice milled, adding to the problem of paddy storage and the agony of the paddy farmer. Rice is nutritionally more beneficial than wheat in view of its relatively high fibre content, high protein digestibility and low calorific value. Therefore, food technologists need to create a wide range of easy-to-prepare, novel, rice-based, value-added products that suit the busy life style of the day and the palate of different age brackets, especially children. That could increase the demand for rice-based products and reduce wheat imports, thereby saving scarce foreign exchange. Therefore it is of utmost importance to adopt a coherent and consistent policy on pricing of wheat flour in a way conducive to the growth of the rice-based food industry that in turn will contribute towards alleviating the marketing problem of the paddy farmer. Rice, in view of its much lower gluten content than wheat, has less binding properties. Therefore products made of rice easily break up. As a result, it is difficult to fully replace wheat flour with rice flour in bread making. However, with advances in biotechnology, gene/s responsible for gluten synthesis in wheat could be transferred to rice so that special rice varieties could be developed for bread making. Such varieties are already available in some countries. Therefore as a long-term measure it is appropriate for Sri Lankan biotechnologists to embark upon such research projects.

Uncoordinated and ad hoc rice imports Sri Lanka has attained self-sufficiency in rice. Therefore only limited quantities of special varieties of rice such as Basmati (about 50,000 tonnes per year) are imported to meet specific needs. However, rice imports other than the above have taken place despite large stocks of paddy over and above the buffer stocks being available in warehouses. As stated before, many warehouses still full with the last season’s crop pose a serious problem for storage of the current season’s paddy crop. Owing to lack of facilities, the paddy storage centres of the PMB and other public sector institutions are not networked. As a result, the amounts of paddy and rice stored in warehouses in different districts at a given time are not known. Besides, there seems to be a lack of coordination between the PMB and Department of Import & Export Control. In future, rice 8 imports should be allowed only under exceptional circumstances and an appropriate tariff regime should be introduced so that the imported rice cannot overwhelm local rice.


The marketing problem of paddy farmer started in the early 80’s with the gradual emasculation of the PMB and the promotion of the private sector to handle the purchasing and milling of paddy. As a result, cooperative societies formed by paddy farmers and small-scale rice mills established for the purpose of purchasing and milling paddy have been gradually smothered. There has been no significant Government involvement to date to counter that, and the protests by farmers’ organizations have not been effective. The outcome is the emergence of a few rapacious mill owners with political blessings who dominate and manipulate the entire paddy industry of the country, holding the poor paddy farmer, the nation’s feeder, to ransom. This situation has serious economic, social and political ramifications and demands urgent Government intervention at the highest level. In this regard, strengthening and expanding of PMB and cooperative societies of paddy farmers, revitalizing small scale rice mills, introducing a pragmatic guaranteed price for paddy and maintaining a coherent and consistent policy conducive to the growth of rice-based food industries assume particular importance. Moreover, farmers’ organizations should be strengthened and empowered to become a force to be reckoned with. Given the enormity and gravity of the issue, the earlier the above are attended to, the better.


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