Sri Lankan government re- establishes competitive agriculture markets with focus on paddy
The government of Sri Lanka has reportedly decided to disburse Rs. 1 billion to small and medium scale mill owners to purchase paddy in order to break existing monopolies and re-establish a competitive market place.
State Minister of Economic Reform and Public Distribution Dr. Harsha de Silva has told the media that concerns had been raised about the dominance of large-scale paddy millers, who purchase paddy at low rates, mill it, warehouse it in large quantities, and release it to the market at much higher prices.
“The President raised concerns about paddy millers gaining exorbitant profits, and wanted us to address this problem. Public Distribution was a ministry we established to deal with problems like this, where market discrepancies are creating issues. This decision is the result of six months of consultations with all stakeholders, including millers, farmers, and banks. We even had talks with Dudley Sirisena,” the Minister has been quoted as saying in the local media.
Following discussions with over 300 small and medium scale mill owners, the government has decided to temporarily intervene in the market by releasing Rs. 1 billion from the Treasury to support the purchase of about 20 metric tonnes of rice.
According to reports, President Maithripala Sirisena had presented the Cabinet paper that had received approval on Tuesday.
Reports state that under the new scheme, which is implemented with the participation of the Sri Lanka Rice Producers Cooperative Limited (Rice-Corp Sri Lanka), most of the small and medium-scale millers have been organised into cooperatives spread out across eight key Districts and these cooperatives are to be given funds by the Government and they will release money under agreement to the millers who are their members. The millers will then use the funds to purchase paddy from the farmers, mill the stock and resell it to the cooperatives.
According to reports, the process is to be strictly monitored via an IT platform, which would also have Agriculture Ministry oversight.
OSL take:
The Sri Lankan government’s move to re-establish a competitive market place for paddy produced in the country is indicative of the commitment towards the improvement of the country’s agriculture sector. The government with Indian assistance is currently in the process of setting up a large scale warehouse in order to increase the capacity of proper storage facilities for vegetables and fruits produced in the country. Foreign companies engaged in agriculture could explore business opportunities in Sri Lanka’s agriculture sector by looking at providing the latest in expertise, products and technology while also looking at forming joint ventures with local companies to engage in direct cultivation.
| Article Code : | VBS/AT/15022019/Z_1 |