Reeling under severe economic crisis, the Sri Lankan government is now forced to restrict the import of a host of essential commodities, including food items Colombo: Sri Lanka is already under an unprecedented economic crisis and amid this people being burdened further as prices of food essentials are soaring high. Buying rice has become dearer in the island nation as the price of the foodgrain has risen to "unbearable levels" in the island nation. A report by Colombo Page mentioned consumers in Sri Lanka saying that the minimum price of a kilogram of rice in the general market has now surged Rs 200-240. Reeling under severe economic crisis, the Sri Lankan government is now forced to restrict the import of a host of essential commodities, including food items which has pushed the price of essentials such as milk powder and rice exceptionally high. Meanwhile, the Ministry of Trade says that rice is being sold at concessionary prices by wholesale network Lanka Sathosa outlets, it was learned from several CWE outlets that imported rice was not meeting the mounting demand. The report further said that Sathosa outlets in many parts of the country are in short supply of essential consumer items including rice, dried chillies and other items. In Sri Lanka, consumers have been demanding the government to take steps to reduce prices by importing rice or setting a control price. Sri Lanka is battling a severe economic crisis, with food and fuel scarcity affecting a large number of the people in the island nation. The economy has been in a free-fall since the onset of the COVID-19 pandemic, leading to the crash of the tourism sector. Sri Lanka is also facing a foreign exchange shortage, which has, incidentally, affected its capacity to import food and fuel. The country is facing long power cuts. The country is also witnessing protests over the government's handling of the worst economic crisis in decades. Yesterday, a protest was held outside the US Embassy in Colombo against the Sri Lankan government.  

COLOMBO (IDN) — A recent statement by a Myanmar official has indicated that Sri Lanka has been buying rice from the country at a price higher than what others are paying for it. This has raised eyebrows in Sri Lanka that has prided itself for being self-sufficient in rice, its staple diet, for decades. In a statement attributed to the secretary of the Bayintnaung Rice Wholesale Depot, U Than Oo, Myanmar’s national daily Global New Light of Myanmar has said that in the past year Myanmar has been exporting rice to Sri Lanka and it has been a very profitable business. “Sri Lanka is a neighbour of ours and it is easy to export rice from Myanmar by sea. We sell rice to other countries at USD 340-350 per tonne, but to Sri Lanka we have been able to sell at USD 440-450 a tonne,” U Than was quoted as saying.  While Myanmar has been fetching over $ 100 per tonne above the price paid by other countries, he has also said that the Sri Lankan authorities have not imposed any restrictions on the import of Myanmar rice. “While Sri Lanka imposes no restrictions, Europe and China have been imposing various tariffs and other restrictions to protect their markets,” says U Than. “So, it is somewhat complex to export rice to these countries.” Sri Lanka has signed a memorandum of understanding with Myanmar on January 7 to import 100,000 tonnes of white rice and 50,000 tonnes of brown rice this year and the next. Due to this agreement Sri Lanka would be spending $ 15 million extra on rice imports. According to a Sri Lankan commerce ministry statement, while Myanmar has quoted $ 465 per metric tonne, the Sri Lankan counterparts have been able to negotiate the price down to $445 per metric tonne. Agricultural industry observers here predict that the rice harvest this year (due for harvest in April) could be down by about 30 percent. Today the rice prices in the market have skyrocketed creating social tension in the country. After the fertilizer subsidies to farmers were lifted (after the organic farming policy was announced) and the guaranteed price for paddy was increased to Rs 75 per kilogram, it has made any price controls of rice in the market place impossible. Government has announced that due to domestic market necessities, Sri Lanka would need to import up to 600,000 tons of rice this year. This would be the biggest rice imports to the country for 5 years. The government has also allocated Rs 40 billion ($ 13.8 million) to compensate farmers for harvest losses due to the switch to the organic farming policy. Due to the import of processed rice, United Rice Producers Society (URPS) says that it is threatening the closure of up to 500 small and medium sized rice mills in the country. “Only 75 percent of more than 800 rice mills in our country are in operation right now,” says Kusumitha Muditha, president of URPS. After a long period of self-sufficiency in rice, on November 15 last year when rice imports began to flow in, it has created this situation, he added. It is estimated that only 2.8 percent of farming land in the country use non-chemical fertilizer. After the announcement of the organic farming policy (in April 2021) some businesses have used household waste to make so-called “organic-compost fertilizer” to sell to farmers, which agricultural sources are worried is a fraud misleading farmer. Most of this is compost of food waste and is not helpful to realize Sri Lanka’s organic farming dream. The Central Bank has estimated that the leadership given to the Sri Lankan economy by agricultural activity has been now reduced by 7 percentage points and it has given rise to an agricultural industry that cannot satisfy farmers or consumers. It has come to a situation that seeds and fertilizer necessary for farmers are hard to obtain. Most of the farmers in Sri Lanka do not own the land on which they farm. Out of the productive land in Sri Lanka, government owns 82 percent.  Many of the farm leases of farmers have expired or lapsed. There are fears that if the traditional methods of survival of the farmers are tampered with, Sri Lanka would need to depend on rice imports into the foreseeable future. The farm costs have gone up including labour and hire of farm equipment. It has also made the farmer a permanent debtor. The Peoples Bank that was set up to assist farmers has now distanced itself from the farm sector, while the government has shied away from assisting the farmer. Today it is estimated that 22.2 percent of Sri Lanka’s food needs are covered by imports. To address this Sri Lanka has imported rice from Myanmar without any checks on its standards and suitability (for Sri Lankan cuisine). Within the Sri Lankan rice production industry there has been a shift in power structures with very few people controlling farming and especially trading. This has had a serious impact on the consumer according to the National Audit Office. They attribute this to the dire straits of the rice farming sector in the country. They have also pointed out that the ownership of rice mills in Sri Lanka has been slashed from 2000 people two decades ago to 800 today. 'Economynext' news noted recently that the government has given the nod to the State Trading Corporation to import limited quantities of rice from Myanmar to help stabilize the price of rice in the local market, which has been pushed up by a milling oligarchy, after Sri Lanka banned rice imports earlier and imposed an import tax. [IDN-InDepthNews – 31 March 2022] * Deshan Maduranga is a media and communication student at the Sri Palee campus of the University of Colombo in Sri Lanka. Image: Myanmar inks G-to-G agreement to export rice to Sri Lanka. Credit: MMR IDN is the flagship agency of the Non-profit International Press Syndicate.    

COLOMBO, March 26 (Xinhua) -- China decides to provide 2,000 tons of rice as emergency food aid to Sri Lanka, said the Chinese embassy here in a press release on Friday. The donation, which was valued at about 2.5 million U.S. dollars (including freight cost), was made at the request of the Sri Lankan government upon its current difficulty of food shortage in the island country, according to the embassy. As the continuously raging COVID-19 pandemic and the dramatically changing international situation have further worsened the global food shortage and shipping capacity, the technical teams from both countries will work closely to finalize the production and shipment arrangements, and deliver the aid to Sri Lanka at an early date, said the embassy. Noting that this year marks the 65th anniversary of diplomatic relations between China and Sri Lanka and the 70th anniversary of the signing of the Rubber-Rice Pact, the Chinese embassy said the two countries have traditionally helped each other and shared weal and woe. China will continue to support Sri Lanka's social and economic development within its capacity, the Chinese embassy added.

By R.M. Samanmalee Swarnalatha Sri Lankan government’s badly planned organic farming policy that has banned the use of chemical fertilizer in farms has upset farmers in this rice-growing heartland and a political stronghold of the ruling coalition. The policy has also drawn criticism from agricultural experts, who warn that Sri Lanka’s food security is at stake. Chairman of Minneriya Integrated Farmer Organization, Anil Gunawardhna argues that the government organic fertilizer program is an utter failure because it was announced without any proper program and work plan to achieve its aims. “The government’s original plan was to achieve this organic cultivation in ten years time.  However, without any discussion with farmers they banned the import of chemical fertilizer,” he complains. Writing in The Sunday Times in May last year just after the government banned chemical fertilizer imports, agricultural scientist Saman Dharmakeethi criticized the decision predicting that it would cause loss of forests and a food crisis.  In his election campaign in 2019 under the theme of ‘ Vistas of Prosperity and Splendour’  President Gotabaya Rajapakse, clearly mentioned that “building up a community of citizens who are healthy and productive, we need to develop the habit of consuming food with no contamination with harmful chemicals”. In order to guarantee the peoples’ right to such safe food, the entire Sri Lankan agriculture will be promoted to use organic fertilizers within ten years, the election policy platform said. When President Rajapakse banned the importation of chemical fertilizers and pesticides in April 2021, he cited health concerns. The ban on its importation was imposed through an Extraordinary Gazette Notification on May 6^th last year, following the Cabinet endorsement of the plan under the theme of  “Creating a Green Socio-economy with Sustainable Solutions for Climate Change”.  The document admitted that the use of chemical fertilizers has led to better harvests but has also contaminated lakes, canals and groundwater. For more than two decades a mysterious kidney disease has been spreading among farmers in the mainly rice-growing areas, which has baffled both hydrologists and medical experts. It is suspected that the overuse of chemicals in farming may be the cause.

Weaning Away From “Green Revolution” Technology

With many vested interests at work, the government is learning a bitter lesson that it is not easy to wean away farmers from the use of chemicals in farming. It needs careful planning and closer consultations with farmers. The agricultural production system in Sri Lanka consists of two traditional and well-defined components. One is the plantation section, established during the colonial period, consisting of large units, and producing perennial crops such as coffee, tea, rubber, and coconut mainly for export. The other is the smallholder sector comprised of small farms, which produce most of the country’s rice, vegetables, legumes, tubers, spices, and fruits. While, fertilizers and pesticides have long been used for the production of plantation crops in Sri Lanka, until several decades ago, most of the smallholder operations were farmed with little or no input of agricultural chemicals. Wide use of chemical fertilizer was introduced to the country during the so-called ‘green revolution’ in the decades 1960-70 along with “high-yielding” seeds.

Costly Fertilizer Imports and Subsidy

In 2020, Sri Lanka imported (both state and private sector) foreign fertilizers worth  $259 million, representing 1.6 percent of the country’s total imports by value according to Central Bank statistics. Sources indicate that the 2021 import bill could potentially total in the range of $300-$400 million given current international prices. By limiting and/or banning costly foreign exchange draining fertilizer and agrochemical imports, the Sri Lankan government aims to generate significant import cost savings. But, Professor Buddhi Marambe, a former Dean of Agriculture Faculty at the University of Peradeniya in recent newspaper articles has warned that an overnight shift to organic fertilizer could lead to crop declines that in turn cause huge food shortages within months. “We have spoken based on science. Without going for evidence-based decisions, nothing will go right,” he argues, refuting claims by the government that they are being manipulated. “Food security is national security,” he stresses, adding, “we must have sustainable policies to ensure food security because there is no point relying on food imports from outside”. 

Rice Farmers’ Grievances

Some rural farmers have already decided not to cultivate Sri Lanka’s staple rice in the ongoing ‘Maha’ or next ‘Yala’ cultivation seasons, because of the government’s failure to supply necessary fertilizers. Farmers here are deeply unhappy at the sudden banning of the import of chemical fertilizer. They mainly cultivate paddy, low country vegetables, cereals, grains, and onions. However, in this ‘Maha’ season, they could not use chemical fertilizer, If the government promised to supply the required organic fertilizer, farmers say they didn’t receive it at the correct time. Rice farmers have thus used different fertilizer that is normally used for tea, cinnamon, and coconut. They say this season’s rice harvest is very disappointing with resulting low incomes. Piyarathna, Chairman, Eksath Sulu Farmer Organization, representing farmers from Dehiyannewela, Divilunkadawala ,Viharagama, Medirigiriya areas told IDN that there are 142 farmers in their farmer organization and they cultivate more than 190 acres using minor irrigation  water. “Our farmers normally harvest 100- 120 bushel (2500-3000 kg) per acre using chemical fertilizer. However, this time farmers can’t expect such harvest due to improper fertilizer usage” he says, adding, “farming is now a business enterprise, (and) farmers cultivate not only for (their)consumption”. Paddy plants take around 3–6 months to grow from seeds to mature plants, depending on the variety and environmental conditions. They undergo three general growth phases: vegetative, reproductive, and ripening. “Our farmers cultivate two groups: the short-duration varieties which mature in 105–120 days and the long-duration varieties which mature in 150 days”, he explained.  “They (farmers) use hybrid seed and not traditional varieties. These hybrids varieties need quality fertilizer to increase the harvest. By using organic fertilizer farmers can’t expect high yield”.  Piyarathna says that farmers in the Polonnaruwa area have complained that the compost they have received is of inferior quality with most of the purchased compost having debris, seeds and stones. Kapila Ariyawasnsa, a 38 year old farmer from the Ekamuthu Bedum Ela Farmer Organization in Mahaweli river irrigation System B told IDN that he cultivate 8 acres of low land  both in Yala and Maha seasons – mainly paddy – and there are also 206 rice farmers belonging to his organization. He thinks that the proposed organic fertilizer program is not practical in their area. “There are not enough resources to make compost in our village. Greenery vegetables can be cultivated using compost, not paddy,” he argues, because  “there is no traditional varieties and only have all hybrid seeds (and) these hybrid seeds need required fertilizer for bumper harvest”. Further, he said that he had to spend Rs 23000 (USD 115) to purchase Yuria in black market. Ariyawasnsa, predicts that the rural economy will collapse after the coming rice harvest. “Farmers won’t have the yield this time, they would get only 30 per cent of the harvest” he predicts.  “Most of the people in Mahaweli area depend on agriculture”. He added that not only Mahaweli B zone, but most farmers in the Polonnaruwa District, would face bad harvests due to the government’s organic fertilizer program. “The current government’s policy (has been based on) unplanned policy decisions” he laments.

Farmer’s Expectation

There is also growing interest among farmers for producing organically-grown food products and they understand the export potential for it. Some farm production units have already experienced considerable success in such ventures. Organic food production and marketing could be greatly expanded in Sri Lanka. But, research is needed to develop organic farming systems and practices that are efficient, productive, and profitable. This is the criticism the government is facing at the moment. M.G. Dayawathi Chairman of Kalukele People’s company said that banning of chemical fertilizer has affected their company’s microfinance system too. “We have given more than 52 lakhs (5.2 million) of cultivation loans to 75 farmers for this Maha season. Unfortunately, farmers would not make the expected income and they are not in position to repay loans” she told IDN “Moreover, farmers mortgage their gold and their vehicles to purchase chemical fertilizer in the black market. They are trapped in a loan cycle.  Government cannot expect livelihood improvement (among farmers) with this kind of unplanned program”. 

ECONOMYNEXT – Sri Lanka’s cabinet of minister has approved the import of 300,000 metric tonnes of rice to increase the supply, a government statement said, with crop losses expected due to the use of organic fertilizer. The Minister of Trade had been given approval to import 200,000 metric tonnes of Nadu type rice (parboiled) and 100,000 tonnes of GR11 short grain rice. GR11 is a substitute for Samba, the statement said. The cabinet had earlier approved the import of 100,000 metric tonnes of rice. These rice will be imported from India, cabinet spokesman Minister Ramesh Pathirana said. Rice prices have moved up and imports are to stabilize prices, he said. Stat-run Sathosa and some private traders have been allowed to import rice, Minister Pathirana said. At least 30,000 metric tonnes had been imported from Myanmar. Sri Lanka has restricted the import of rice which has allowed millers to drive up prices. However in the Maha season, where harvesting begins from around February, crop losses are expected due to a ban on chemical fertilizer and agro-chemical import. (Colombo/Jan11/2021)

 ECONOMYNEXT - Sri Lanka expects to harvest 988,000 metric tonnes of paddy (rough rice) during the ongoing drought stricken Yala minor cultivation season, down 35 percent from a year earlier, the lowest in a decade, data from the state agriculture agency showed.

Thu, Jul 6, 2017, 09:47 pm SL Time, ColomboPage News Desk, Sri Lanka. July 06, Colombo: Following a first round of assessment, Sri Lanka has decided to take a closer look at four international rice suppliers to meet its urgent market needs, Minister of Industry and Commerce Rishad Bathiudeen said today. On the directions of President Maithripala Sirisena, Sri Lanka plans to purchase 100,000 metric tons of rice to meet its needs and has decided to test rice samples of Indonesia, Myanmar and Pakistan. Minister Bathiudeen during a discussion held on Thursday with his officials on the progress of rice procurement from abroad, said a team of technical officials including officials and food technologists from Sri Lanka are to visit these countries and test rice samples after which the government will decide on the final supplier from Colombo. Sri Lanka is looking to buy 100,000 MT par-boiled (Nadu) and Samba from the chosen supplier. "This will be Government to Government procurement - a speedy way to get rice for our domestic market," the Minister said. "If necessary we are open for private sectors support in the supplier countries as well," he added. He disclosed that Sri Lanka is also talking for another 100,000 MT rice, from India, the details of which have to be finalized. The Cooperative Wholesale Establishment (CWE) under the minister will be the focal point for the effort Minister Bathiudeen last month held discussions with the envoys of Indonesia, Thailand and Pakistan on finding a supplier of rice to Sri Lanka.  

Posted on June 23, 2017 | In Pictures

ECONOMYNEXT - Sri Lanka's rice millers have refused to sell rice at rates dictated by the state price control authority and are asking for higher prices. Sri Lanka's Consumer Affairs Authority, the agency that slaps price controls on anything from hoppers to a cup of tea, issued controlled prices of Rs80 for a kilogram of Samba rice, Rs72 for Nadu (a parboiled rice) and Rs70 for Kekulu (raw rice), exposing the flaws of Sri Lanka's economic policies to the world. Sri Lanka's rice prices surged after the drought due to import taxes blocking foreign rice from entering the country. The millers wanted a price of Rs90 for a kilo of Samba, Rs87 for Nadu and Rs80 for Red Raw. Sri Lanka's Daily Mirror newspaper said the call for higher prices was issued following a meeting in Polonnaruwa with about 120 rice processors. They came from Polonnaruwa, Anuradhapura, Marandagahamula, Kekirawa, Kantale, Nikaweratiya, Anamaduwa and Tissamaharama. Rice millers wanted a meeting with President Sirisena. Unlike small shopkeepers who are dragged to court by the Consumer Affairs Authority, large millers have political clout. Among the largest rice millers is Dudley Sirisena, brother of President Maithripala Sirisena. Most millers who bought rice last year had acquired them at lower prices. Millers have also been given credit from state banks in the past to buy rice. But millers also have to maintain warehouses to store rice for long periods. At state warehouses, rice deteriorate quickly and is sold as animal feed. Somewhat higher rice prices now could potentially allow millers to buy rice at the upcoming Maha season paddy (rough rice) at higher prices, giving higher incomes to farmers, many of whom grew lower volumes of rice. However, many farmers had crops destroyed or did not grow rice this season at all. Meanwhile, in an unusual move, which is not expected of the current administration that has acquired a reputation for policy blunders including price controls, the finance ministry cut the import tax on rice to Rs5 a kilo from Rs15, allowing foreign rice to come in. Finance Minister Ravi Karunanayake said anyone could import rice and government agencies would stay out of the market. Analysts say a regular flow of foreign rice can stabilise prices regardless of whether local millers sell or not. (Colombo/Feb13/2017)

Five companies have won contracts for the export of 50,000 tonnes of rice to Sri Lanka by June, according to the Myanmar Rice Federation. Commerce minister Dr Than Myint held talks with a delegation led by the Sri Lanka ambassador to Myanmar, KWND Karunaratne, at his office in Nay Pyi Taw on January 23 and signed a memorandum of understanding on rice exports. An MRF official said: “We invited companies to submit bids for rice exports to Sri Lanka. Only 10 companies applied. Of them, we have selected five companies.” Sri Lanka’s rice production has declined by about 200,000 tonnes after a drought last year. Sri Lanka is reducing rising rice prices and the control of rice millers by reducing import tariffs. Since April, Myanmar has exported 1.15 million tonnes of rice and broken rice, down nearly 150,000 tonnes from the same period last year, according to the Ministry of Commerce. With more countries offering to buy rice from Myanmar, exports are expected to reach last year’s level, said Khin Maung Lwin, assistant permanent secretary of the ministry. In 2015-16, the country exported 1.5 million tonnes of rice. Myanmar has exported rice to Sri Lanka in the past, but only in small quantities and without any agreement at the government level.