Experts say that as Sri Lanka’s production outlook improves, the new government must seize the opportunity to reform the agricultural sector. This includes investing in infrastructure, regulating market practices, and ensuring that the benefits of self-sufficiency are felt by farmers and consumers alike.
By Dushyanthi Wikramsinghe
Sri Lanka is set to import 70,000 metric tonnes of rice to address a growing shortage in the domestic market, Trade, Commerce, Food Security, and Cooperative Development Minister Wasantha Samarasinghe announced. Despite a reported surplus in rice production this year, the staple grain has become scarce in local markets.
“The farmer has no paddy, and the consumer has no rice,” Samarasinghe stated during a press briefing. “The best decision we can take in this situation is to import rice to meet the demand.”
The imports will be handled by state-run entities, including Sathosa and the State Trading Corporation, to stabilize supply and prevent further price hikes.
A Confusing Surplus
According to former Director of Agriculture, K. B. Gunaratne, to achieve this target, an additional 200,000 metric tons of paddy must be produced each month; totalling 2.4 million metric tons annually. Furthermore, to support this target, approximately 3.7 million metric tons of paddy are required each year.
Sri Lanka’s agriculture data suggests that the nation should be self-sufficient in rice. The country produced 2.42 million metric tonnes of rice in the Maha season and 1.24 million metric tonnes in the Yala season, totaling 2.88 million metric tonnes for 2023. This output, based on consumption trends, should have left a surplus of 420,000 metric tonnes.
However, a disconnect between production and distribution has led to a shortage in markets, raising questions about inefficiencies in storage, transport, and market regulation.
Experts have highlighted the dominance of a “rice monopoly,” where large-scale mill owners control pricing and distribution. Despite government guarantees for a minimum paddy price, private mill owners often purchase at reduced rates, creating disparities in market access.
Production Projections for 2024
If Sri Lanka was self-sufficient in rice, there would be no need to import even a single grain. Yet, in 2023, 28,380 metric tons of rice were imported, costing 6,091 million rupees. Despite this, in January 2024, former Agriculture Minister Mahinda Amaraweera claimed that the country was self-sufficient in rice.
Looking ahead, the US Department of Agriculture (USDA) predicts a strong recovery for Sri Lanka’s rice production. Paddy harvests are expected to reach 5.02 million metric tonnes in the 2024/2025 market year, supported by favorable weather conditions and lower fertilizer costs. The government has also expressed hope for an increase in milled rice output to 3.42 million metric tonnes.
Nevertheless, the country faces structural challenges. Paddy production needs to grow by at least 3 per cent annually to match rising per capita consumption, which has climbed to 114 kilograms following the COVID-19 pandemic. Achieving this target would require cultivating 1.3 million hectares annually across the Yala and Maha seasons, which is feasible given Sri Lanka’s agricultural potential.
The Economic Toll of the Rice Crisis
The ongoing rice crisis highlights the fragile state of Sri Lanka’s economy and food security. A recent survey by the World Food Programme and the Food and Agriculture Organization found that food insecurity has risen sharply, with 24 per cent of families now struggling to afford basic meals.
Rising costs have further compounded the problem. Families now spend up to 75 per cent of their income on food, while rice prices have surged to over Rs. 220 per kilogram in local markets. These prices are significantly higher than the Rs. 150-160 range that experts believe would be achievable with government intervention and better market regulation.
Breaking the Monopoly
The dominance of a few large-scale mill owners exacerbates the rice crisis. These mill owners profit regardless of weather conditions, elections, or market disruptions. By purchasing paddy at low prices and hoarding supplies, they manipulate market dynamics to their advantage.
In contrast, smaller mill owners have offered rice at more affordable prices, but their operations are often overshadowed by the political influence of larger players.
Reforming the system requires significant government intervention. Reviving defunct institutions such as the Paddy Marketing Board and cooperative societies could restore fair pricing mechanisms and ensure that farmers and consumers are better protected.
Long-Term Solutions
For Sri Lanka to truly achieve self-sufficiency in rice production, the government must prioritize sustainable and scientific farming methods, say experts. Modernising paddy milling facilities, providing subsidies for agricultural machinery, and encouraging the cultivation of export-grade rice are critical steps.
Additionally, strengthening the agricultural policy framework to address inefficiencies and monopolistic practices is essential. Ensuring that at least 10 per cent of annual paddy production is controlled by the government could stabilize prices and break the stranglehold of private mill owners.
A Path Forward
The rice crisis in Sri Lanka underscores the need for a balanced approach that addresses both short-term shortages and long-term structural issues. Importing 70,000 metric tonnes of rice is a necessary step to ease immediate pressure on consumers, but it is not a sustainable solution.
Experts say that as Sri Lanka’s production outlook improves, the new government must seize the opportunity to reform the agricultural sector. This includes investing in infrastructure, regulating market practices, and ensuring that the benefits of self-sufficiency are felt by farmers and consumers alike.
Without decisive action, the cycle of scarcity and surplus will continue to strain the nation’s food security, leaving millions vulnerable to rising costs and inadequate nutrition.
