New tax puts small-time rice millers out of business

By A.A. Premasiri

Around 75 percent of small and medium scale rice mills had been closed down, W.H. Gamini, Tissamaharama Rice Producers Association Chairman, told The Island on Friday.

“Now, we have to pay an additional 2.5 percent social security tax. We have decided to stop buying paddy until we are exempted from this tax,” he said.

 Gamini also said that the government had to look into policies that discourage small and medium scale rice mills while encouraging a monopoly by large rice mills.

“Around 60 percent of the rice consumed by Sri Lankans is produced by small and medium scale rice mills. However, we don’t have the political or financial muscle that the big guys have. With the new social security levy we have to pay an extra five rupees to the government from each kilo of rice we produce. We have to pay another five rupees when we release the rice to the market. We can’t increase the price of rice. If this continues 200,000 people will lose jobs,” he said. Meanwhile, Polonnaruwa district Samagi Jana Balavegaya (SJB) MP Kins Nelson said that large scale rice millers are now buying paddy, at a low price, as small scale mills have reduced purchasing, and the government has ceased purchasing paddy completely.

“The farmers are also in trouble. They don’t know what the price of fertiliser will be. They don’t know if they will get enough fuel. Those who farm have their harvest bought off cheaply by a few big players. When the harvesting time came, we asked the government to buy a kilo of paddy at 150 rupees. Some henchmen of big rice mill owners said if this was done the kilo of rice would be sold at 300 rupees. Guess what, a kilo of rice is around 300 rupees while farmers get a pittance,” he said.