Wednesday, October 5, 2022

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Govt. to import rice from Myanmar pushing the country into crop crisis

The economically troubled Sri Lanka banned chemical fertilizers without a proper plan for green farming and neglecting the preparation of farmers, prompting a surge in food prices and worries of rice and vegetable shortages.

Sri Lanka’s farmers continue protesting President Gotabaya Rajapaksa government’s abrupt ‘organic fertilizer only’ policy shift since May this year.

Agriculture experts have slammed the move as “ill-advised” and “unscientific”, while farmers anticipate that the drastic policy change could slash their yield. 

Paddy farmers anticipate a 25% production slump, while growers of tea, which is a key foreign exchange earner for Sri Lanka, fear a likely 40 – 60% fall in output.

Under this precarious and blunderous set up another unexpected and controversial Government-to-Government (G2G) agreement was signed with Myanmar On Friday 08 to purchase 100,000 tons of rice, to maintain a buffer stock with immediate effect.

The Memorandum of Understanding (MoU) was signed by Trade Minister Bandula Gunawardena and Myanmar Deputy Commerce Deputy Minister Dr. Pwint San.

The rice stocks will be imported through State Trading Corporation (STC). The 100,000 tons of rice will be maintained as a buffer stock to ensure that there will be no shortage in the future.

Since June 2021, the Government has decided to import rice on four occasions, whilst removing the Maximum Retail Price (MRP) on the country’s staple food, giving room for the large-scale rice mill owners and traders to jack up prices at their convenience.

On 24 November 2021, the Cabinet of Ministers approved to import 100,000 tons of rice in a G2G agreement with Myanmar, to maintain sufficient buffer stocks and to stabilize local market price. 

The STC was given the approval to import at $ 460 per ton of rice from Myanmar to stabilize the local market prices and to offer the country’s staple food at an affordable price for the general public.

In a bid to counter possible shortages and maintain buffer stock, the Cabinet of Ministers on 27 September 2021, decided to import another 100,000 tons of rice from India and Thailand under a G2G agreement as per a proposal by Trade Minister Bandula Gunawardena.

In August, the Government decided to import 6,000 tons of rice through the Sri Lanka-Pakistan Free Trade Agreement (FTA) as a short-term measure to address the shortage of rice in the market. Previously in June, the Cabinet decided to import 100,000 tons of Samba under the G2G deal.

Early November, Finance Minister Basil Rajapaksa reduced the special commodity levy of Rs. 65 per kg of imported rice to 25 cents. The move is for six months from 2 November and will ensure sufficient stocks ahead of the festive season.

Sri Lanka’s annual rice consumption requirement is around 2.4 million tons and the paddy harvest for the 2020/2021 Maha season and the 2021 Yala season is around 4.8 million. The collective production of rice is about 3.2 million tons.

Meanwhile, the Trade Minister had informed the Central Bank to release necessary foreign exchange to release 800 containers of rice held at the Colombo Port.

“The Minister assured to clear the 800 rice containers stuck at Colombo Port with immediate effect, as stakeholders are faced with heavy warehouse charges. It is not our fault that banks are not releasing foreign exchange to release containers,” Essential Food Importers Association said. 

They pointed out that it was unfair by the banks to not release foreign exchange for the goods imported. “When prices soar or there is a shortage of goods in the market people and authorities are blaming importers and traders, but the actual culprits are the banks,” they charged.

A Presidential task force appointed by the President will look into the quality of organic fertilizer produced in the country and it is responsible for looking into the requirement of fertilizers and improving the quality of organic fertilizer produced in the country

If the government’s policy shift took the country by shock, the newly appointed panel has drawn attention for its composition. “It is striking that even now the task force has no scientists who study and research agriculture,” said Saman Dharmakeerthi, Professor of Soil Fertility and Nutrient Management at the Faculty of Agriculture, University of Peradeniya. 

The “danger” with the heavy private sector presence is that “they might promote anything they produce and insist that farmers use them,” he added.

Describing the government’s fertilizer ban “a blunder” that threatens food production in the country, the soil scientist noted that “It is a contradiction because Sri Lanka  import of organic fertilizer [ that continues] will still keep the import bill high, and if we don’t have enough produce, we would be forced to import more food items from other countries, which will also be expensive.” 

The government must instead go in for an integrated plant nutrient management scheme, combining chemical and organic fertilizers, in Prof. Dharmakeerthi’s view. Sri Lankan scientists are also concerned about the limited availability of organic sources in the country, he said. “

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