Paddy Purchase Only By Permit: The Best Solution!

By Hema Senanayake –September 18, 2015

Hema Senanayake

It has been reported that Finance Minister Ravi Karunanayake told theSunday Times that President Maithripala Sirisena had appointed a six-member cabinet sub-committee, comprising, among others, Agriculture Minister Duminda Dissanayake and Rural Economic Affairs Minister P. Harrison, to streamline the purchasing of paddy. Still, by the time of writing this article, I could not find out who the other members of the said cabinet sub-committee and what the committee’s terms of references are. However, in this article, I intend to discuss a possible solution in streamlining paddy purchase. Therefore, the ideas I discuss here might be useful to the above mentioned six member cabinet sub-committee appointed by the President and to the farmers.

First, no matter whether it is right or wrong, now the government has declared a guaranteed price for the purchase of paddy. The guaranteed price is Rs.50 per Kilo of paddy which has less than 4% of moisture. In general paddy farmers understand the quality requirements stipulated by the government or by the private buyers. In this regard paddy farmers are reasonably good people.

When the government declared a guaranteed price, the government intends that paddy stock would be purchased at the guaranteed price by the paddy buyers. Unfortunately, from past experiences, the government knew that private paddy buyers sometimes purchase paddy at half rate of the guaranteed price. In fact this was the case. Then, as a possible solution, the government had directed the Paddy Marketing Board (PMB) to purchase paddy at the guaranteed price. Unfortunately, the monetary allocation provided to PMB was just sufficient to buy 5% of the paddy stock. What happens to the balance 95%? Would that stock be purchased at guaranteed price by private buyers? You know the answer to this question. It is common sense that buying 5% of the paddy stock at guaranteed price by PMB cannot resolve this issue. Therefore, the real solution must be a total solution which solution can only be possible with inclusive of private sector buyers. Even paddy farmers understand it.           Read More