The Sri Lankan government is set to restructure the Paddy Marketing Board (PMB) to provide better support to farmers and ensure stable rice prices amid prevailing market challenges.
Previously inactive and burdened with a Rs. 28 billion debt to state banks, the PMB will now play a crucial role in directly purchasing paddy from farmers at guaranteed prices, eliminating inefficiencies and market manipulation.
President Anura Kumara Dissanayake has directed officials to strengthen the PMB by upgrading paddy storage facilities and involving small-scale millers in rice production.
Additionally, the government aims to cultivate 1.3 million hectares of land during the Yala and Maha seasons to boost annual rice production.
These steps are designed to curb excessive profits made by large-scale millers, ensuring fair prices for both farmers and consumers.
Despite these measures, inefficiencies within the Food Department, cooperative societies, and even the PMB itself continue to hinder progress.
To counter this, the government plans to purchase between 300,000 and 400,000 metric tonnes of paddy during the 2024–25 Maha season for processing and distribution through cooperative networks such as Sathosa.
This strategy is intended to challenge the dominance of large-scale rice millers, who have been accused of artificially inflating prices.
While Sri Lanka’s daily rice consumption stands at 6,500 metric tonnes, the PMB’s recent intervention only resulted in the purchase of 119 metric tonnes of Keeri Samba rice last season. Expanding the storage capacity of PMB warehouses to 400,000 metric tonnes through renovations could significantly improve stock management and price stabilization efforts.
Agriculture Ministry Secretary M.P.N.M. Wickramasinghe emphasized that market manipulation, rather than actual supply shortages, is the primary cause of rice scarcity. Even with price controls, farmers struggle to sell their paddy, leading to market imbalances.
To address immediate shortages, the government will import 70,000 metric tonnes of Nadu rice through state-run agencies like Sathosa and the State Trading Corporation (STC). These imports, priced at Rs. 220 per kilogram or lower, will commence on December 15, according to Trade Minister Wasantha Samarasinghe.
Although Sri Lanka produces 3.53 million metric tonnes of rice annually, unaccounted surpluses and industrial redirection, such as the use of rice in arrack production, contribute to supply issues. The country’s annual rice consumption is estimated at 2.4 million metric tonnes, with a monthly production of 200,000 metric tonnes.
The cost of rice production stands at Rs. 25 per kilogram, while retail prices have surged to Rs. 220 per kilogram. Government intervention is expected to reduce prices to a more manageable range of Rs. 150–160 per kilogram.
The revival of the PMB is seen as critical for small and medium-scale millers, many of whom have struggled with debt and closures. According to their association’s president, P.K. Semasinghe, nearly 10,000 mills have shut down over the past decade, leaving only 700 in operation.
He stressed that if the PMB purchases paddy and supplies it to small millers, rice prices could be maintained below Rs. 220 per kilogram. This initiative could benefit both farmers and consumers by stabilizing the market and preventing price manipulation by large-scale millers.
