Rice: Economic Boom or Bust? Part VII
Bojoon.com and CIC has teamed up to review one of the most
controversial debates of Sri Lanka - is rice as an industry worth the
effort.
The discussion so far...
Rice as an industry comes under heavy fire as an unprofitable venture
notes Dr. Sumith Abeysiriwardena - Senior Consultant Researcher of CIC
Agri Businesses. Yet, he points out, instead of being abandoned as such,
rice production over the last 6 decades has increased by 12 times!
He points out the tremendous demand for rice, ease of handling the
grain, especially in terms of storage, and as a crop the only use that
can be made out of marshy lands. He continues that with our technology
and our unique hydraulic systems our productivity is high and asserts
that history has proven that rice is more than our staple, but also our
stronghold against our many enemies.
He describes while countries like Australia is making a concentrated
effort to create a viable export and domestic industry, we have
decreased our rice consumption for wheat, making us vulnerable to
adverse foreign influences.
He feels that though buffer stock comes with its own set of problems,
it provides a good solution to stabilize our staple, especially with
agriculture been such a vicious cycle. Our neighbors' plans and actions
certainly seem to be reciprocating his very thoughts.
The discussion continues:
Managing Director and CEO of CIC Agri Businesses Keerthi B. Kotagama
agrees with Dr. Abeysiriwardena and goes on to show that there is an
imminent need for Sri Lanka to build a buffer stock. Even if the most
optimistic statistics are taken, says Kotagama, numbers show that by the
end of year 2008 Sri Lanka is heading towards a chronic shortage in
rice.
If year 2008 is assumed to produce the same figures of year 2006 and
thus assumed to yield 4.3 MT/Ha (which is a very optimistic figure,
stresses Kotagama) and if the population is considered to be at 20 Mn
with the wheat imports coming down from 950,000 MT to 450,000 MT due to
high wheat prices and if this balance 500,000 MT wheat consumption was
to be replaced with rice, then we can derive the following calculations,
says Kotagama:
In 2004, per capita rice consumption was 105 Kg/year.
In 2004, per capita wheat consumption was 35 Kg/year
If wheat imports were to come down by 50 per cent in 2008, then rice
consumption should increase by the same amount, which is approximately
by 15 Kg/head/year, reasons Kotagama.
 With the increase in paddy prices, the extent cultivated in year 2008
should also increase. On the strength of this footnote, the following
can be derived, explains Kotagama:
Sri Lanka cultivates two seasons of rice - the Maha, which is
harvested in March and the Yala, which is harvested in September. Even
when the most optimistic figures are taken, and the extent Maha season
harvested is assumed to be 524,803 Ha and the extent Yala is assumed to
have harvested is 282,960 Ha, the average yield at its highest would be
4.3 MT/Ha.
Kotagama points out that this average yield is assumed without taking
into consideration the effects of floods and other adversities that
affect the harvest. If the above figures were achieved, then it can be
calculated:
Even though there is a higher demand for rice during December, if it
were assumed that in all 12 months that the rice consumption is 200,000
MT / month, Sri Lanka would be facing a rice deficit from early November
points out Kotagama and illustrates his point through the following
table:
This is the most optimistic situation stresses Kotagama. Even with
these high figures, that has discounted the effects of recent floods and
any other possible calamities that would affect rice production, Sri
Lanka needs to build a buffer stock of at least 350,000 MT for
consumption from beginning of November.
Join Daily News next Friday as bojoon.com unravels with CIC many
mysteries and misinterpretations surrounding rice cultivation in Sri
Lanka.
Share your own opinion by simply dropping an email to [email protected].
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