Rs.1200 m disbursed for purchasing Yala paddy

by Uditha Kumarasinghe

In a bid to strengthen private sector participation in paddy purchasing and to offer the maximum possible price to farmers, the Government has already disbursed Rs.700 million to 470 rice mill owners to purchase the Yala paddy harvest and the Treasury has already released Rs.500 million for State institutions to purchase the Yala paddy harvest, Agriculture, Public Security, Law and Order Minister and Acting Defence Minister Ratnasiri Wickremanayake told a media briefing yesterday.

The sole intention of the Government is to take precautionary measures which will enable farmers to sell their paddy at the highest possible price in the local market. The responsibility of the Agriculture Ministry is not only provide an exact price for paddy but also other agriculture products of farmers, Minister Wickremanayke said.

The Minister said in order to encourage private sector paddy purchasing, the Government has already provided a number of facilities to the private sector to purchase Yala paddy harvest.

"Even though the Government has already disbursed a large amount of money to the private sector, certain mill owners have not yet commenced purchasing paddy. I have instructed the banks to submit a detailed report on the amount of loans disbursed to each mill owner to purchase Yala paddy. Action will be taken in future against those who have not purchased paddy from farmers."

Even with the Paddy Marketing Board, the Government could purchase only 11 per cent of the country's total paddy harvest. The Government has no capacity whatsoever to purchase the country's total paddy harvest. What the Government can do is to handle the local market recommending a fixed price preventing a reduction of paddy prices, he said.

In order to create a systematic market and offer a concessionary price for farmers products, the Ministry will set up three institutions on vegetable, fruits and grain, he said. Agriculture Ministry Secretary Tissa Warnasuriya said 90 per cent of the paddy harvest is purchased by the private sector. Therefore, the Government has reduced the 14 per cent interest rate to 7 per cent encouraging private small and medium scale rice mill owners to purchase the Yala paddy harvest.

Paddy is now purchased at the guaranteed price. A Kilo of Sudu Nadu paddy is purchased at Rs.15.50 while a Kilo of Rathu Nadu is Rs.16.50. In addition a Kilo of Samba paddy is purchased at Rs.20, he said.

Advisor to the Finance Ministry N.B. Liyanaarachchi said the Government has written off 25 per cent of the total amount of loans obtained by small and medium scale rice mill owners while seven years grace has been given to settle the balance amount of the loan. In addition, the People's Bank and the Bank of Ceylon have written off 600 million in loans obtained by rice mill owners.

Due to various relief measures given by the Government, 205 rice mills which were not functioning have commenced operations during this Yala season, he added.