Sri Lanka mulls using imported rice for animal feed to keep farmgate prices up
ECONOMYNEXT – Sri Lanka’s Agriculture Minister Mahinda Amaraweera has suggested using imported rice stocks for animal feed as farmers who cultivated a record extent in the current season call for higher farmgate prices for paddy.
“There was a need to import rice some time ago,” Minister Amaraweera said. “But this (Yala) season farmers have cultivated more paddy than in seasons when fertilizer was given free.”
“This season farmers have cultivated 512,000 hectares. Now our problem is to ensure that the paddy is purchased. There is no longer any need to import rice. But it is alright to import rice for animal feed.”
Sri Lanka’s Consumer Affairs Authority whose coercive interventions and price controls disrupt agriculture and food markets banned the use of rice for animal feed in June 25.
The CAA can issue disruptive gazettes at midnight while the population is sleeping. It has now created a crisis among poultry farmers who have no political clout with a price control, while rice farmers are calling for higher prices.
Imported rice is selling for around 190 rupees while domestic rice prices are controlled by several large millers who have silos sell for around 220 rupees.
Sri Lanka rice prices soared after the rupee collapsed from 182 to 360 to the US dollar after the central bank printed money for two years to supress interest rates.
There have been calls to restrict the agency’s independence to print money (open market operations) to stop currency depreciation, impoverishment of the population and social unrest.
Minister Amaraweera has come under fire from some quarters for suggesting that rice be used for animal feed.
Sri Lanka authorities promised 120 rupees a for a kilogram of rice through the state-run Paddy Marketing Board up from around 50 to 55 rupees last year but are awaiting cash from the government.
Private millers are now buying rice for around 100 rupees or less but farmers want the promised rate.
Farmers say cultivation costs have doubled. Tractor fees for preparing land has doubled from 12,000 rupees to 20,000 to 24,000 and combine harvesting costs have also similarly gone up to around 25,000 rupees they say.
