Via E mail: More funds needed to purchase paddy
With the 2007/0 Maha paddy season being harvest the pet subject
‘certified price for Paddy’ has once again come up. As usual the
government and the opposition parties are at loggerheads casting the
slogans that have been used year after year debating on this certified
However unlike in the previous years this year more private sector
buyers including super market chains have come forward to purchase paddy
and President Paddy Small Holders Sociality Polonnaruwa, W. A.
Veenadhipathi explains what steps should be taken to keep the price of
rice in manageable levels.
Q) What is the present issue facing the industry?
The issue is with the price of Rs. 20 that is being offered by the
government. Though the government is offering Rs. 20 the private sector
is already offering to but a kilo of Paddy at a higher rate.
The end result would be that the private sector would purchase paddy
at a higher rate, stock it, create an artificial scarcity and release
them to the market when there is a high demand. This price would be very
much higher than the present price of a kilo of paddy and I can predict
it to be around Rs. 100 a kilo which would be a record.
Q) How can this problem be overcome?
The government usually allocate around Rs. 300 million to purchase
paddy. AS the private sector is engaged in the business more
aggressively the government should allocate more funds this year.
Q) Since the government do not have the storage capacity as strong as
the private sector how can the state stock the paddy?
This year the novel system could be implemented. First the state
should purchase paddy at the rate of Rs. 24 through not only the Paddy
Marketing Board but through the Cooperative movement as well.
Subsequently this paddy should be milled through the private sector
mills that are already willing to do it. The third step is to pack the
rice and market them through the cooperative and super markets. When
this system is in place due to the competition the prices of rice would
automatically come down by at least 20 percent.
If this system can be implemented at the next Yala season as well the
rice prices would be reduced by a further. The advantage in this system
is that while the farmer gets a good price the end consumer too could
purchase rice at a lower rate which would also result in more bare land
being cultivated as farmers know that they get their money’s worth.