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RICE: Economic Boom or Bust? Part XXIII

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 unprofitable notes, Senior Consultant Researcher of CIC Agri Businesses Dr. Sumith Abeysiriwardena. Yet, rice production in the last six decades has increased by 12 times! There is demand, easy to handle grain and the only crop for marshy lands. With our technology and unique hydraulic systems our productivity is high and history proves rice is both our staple and our stronghold against our many enemies.

While other countries have made a viable export and domestic industry, we have decreased our rice consumption for wheat, making us economically vulnerable. The region believes that buffer stock provides a good solution to stabilise the staple, especially with unpredictability of agriculture. MD/CEO of Agri Businesses Keerthi Kotagama, calculates that even with the best estimates, rice shortage is imminent at least at the tail end of year 2008, and a buffer stock is the only solution to address this immediate problem.

He continues that with production of ethanol due to increasing fuel prices and globalisation, there will be a severe rice shortage worldwide. The intervention programmes of our immediate neighbours, though taken with the country’s interests, are causing unintended long-term repercussions threatening to create a hungrier world. This has provided Sri Lanka a strategic moment that if used right would propel its rice industry to new levels.

By developing the export market, he calculates that both the farmer and the local consumer will get a reasonable price. However, he continues the socio-fabric since colonisation with its many pluses makes intricate agricultural projects and concepts like farmer associations impossible. Though farmer associations are a hard sell, they bring forth an array of benefits notes Dean of the Agriculture Department of Peradeniya University, Professor Buddhi Marambe such as accruing proper data for research, adapting proper technology and educating the farmer on finance management. However, he continues that if the Government looks into the unconventional resource of University undergrads then the Government would be able to match the capacity of the private sector in conducting extension programmes.

The new issues such as food shortages, produce been mapped for carbon and penalised for food miles an open mind is needed for new technology as GM. However, GM is not the panacea to the looming food crisis because there are other factors than food production itself that creates the problem.

The discussion continues:

The three things the local farmer is deprived of are technology, credit and direct access to the market.

Technology exists, but more on cultivation than variety. As the varieties promoted by the State are the high yields without necessarily been of high quality, the local farmer is often confined to only a certain market sector and therefore cannot move out of his low income bracket. Just as in technology, there are numerous credit lines available for agriculture, but not to the projects the farmer wants to venture. He is thus restricted and imprisoned within a certain sector.

Even if the farmer were to overcome his first two restrictions and produce the high quality varieties, he does not have the capacity to market it on his own. The high quality varieties are dominated with imported rice such as basmati and Thai jasmine. Even with local high quality varieties such as suduru samba, keera samba and muthu samba, which are of the same soft and refined as the imported rice, the farmer has not been able to create the due impact in the market.

Thus, the local consumer almost always opts for the imported basmati, especially when cooking for a special occasion and would rather pay more for this imported basmati than for the local sambas.

The farmer is further restricted because he does not have access to market statistics, or the global trends to make the proper predictions to plan his cultivation. Rather than the State, it is the lack of organisation between the farmers that has created these restrictions, notes Mr. Kotagama. Thus, the farmer lives in relative ignorance, without actually realising the full potential of rice cultivation.

This is why projects such as the out-grower introduced by CIC have been so successful. These offer a solution to the main three problems of lack of technology, credit and market access desired by the farmer. CIC has the capacity to research - not only of new varieties, but also to gauge market trends. It has the capacity to create new markets for its new varieties.

The expertise within CIC has allowed it to reach to the farmer and incorporate into a scheme of cultivation, where the farmer buys the paddy seeds from CIC and cultivates rice under their guidance. Once the crop matures, CIC buys back the rice and supplies it to its new markets.

While this is a very straightforward partnership, these kinds of projects have invited criticism and have created a fear psychosis among the public. As the varieties promoted by these kinds of projects are of hybrid, it is believed that farmers would always be bound to programmes such as these.

Join Daily News next week as bojoon.com unravels with CIC many mysteries and misinterpretations surrounding rice cultivation in Sri Lanka. Share your own opinion by sending an email to [email protected]. For more information of who we are, visit www.bojoon.com