By Deshan Maduranga
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
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