Uproar on rice

Rice is the staple food of the islanders and a steep increase in the price of the commodity has the potential to become a political hot potato. The perceived shortage of the nation’s staple food, particularly Nadu Rice – the most popular rice variety among consumers – has dominated the news headlines over the last few weeks. 

It is reported that Nadu makes up about 60% of the country’s rice production. With the General Election just two weeks away, the hotly debated issue has turned out to become a headache for the newly elected President Anura Kumara Dissanayake.

Opposition politicians and various consumer activists have alleged that large-scale rice millers are attempting to create a shortage of rice by releasing limited quantities to the market with the intention of earning super normal profits at the expense of the consumers. Every year from October to January, a cartel of rice millers is accused of habitually hiding rice stocks in a manipulative manner to hike up the price of rice. Some of these large-scale millers have powerful political connections and fund the election campaigns of leading political leaders.

According to the Department of Agriculture, the 2024 Yala season has produced a record harvest of 2.6 million metric tons of paddy. It has often been stated, that the price of rice does not come down despite the increase in production. For a long period of time, analysts have pointed out that an oligopoly, which acts in the form of a well-organised cartel, exists within the sphere of rice supply in the country, thus, causing hardships to the populace. The Government provides a considerable amount of assistance from taxpayers’ money to paddy farmers via the fertiliser subsidy as well as free provision of water through irrigation systems. Under such circumstances, it would be a travesty of justice if consumers have to end up paying unreasonably high prices for the most consumed food commodity due to devious business practices of greedy rice millers.

The history of the South Asian State is such that increases in rice prices had even caused political turmoil, leading to mass protests, civil unrest apart from resignations of heads of governments. When the then Finance Minister J.R. Jayewardene cut the rice subsidy in 1953, the price of rice rose from 25 cents to 70 cents per measure immediately. Subsequently, a country-wide demonstration of civil disobedience and strike, referred as 1953 Hartal, took place, resulting in 10 protestors getting killed.

Be that as it may, the solution to the anomaly in the price of the staple food needs to be implemented within the mechanism of market forces itself. The temptation to resort to tried and tested failures such as Government-mandated price controls would only make the matters worse. One may recall, the administration of former President Gotabaya Rajapaksa introduced countless gazettes at various times, stipulating maximum price limits. But those ill-advised moves did not produce the desired results. Instead, such moves contributed towards the Government at that time becoming highly unpopular.

Back in 2019, an initiative was undertaken by Dr. Harsha de Silva in his capacity as the then Non-Cabinet Minister of Economic Reforms and Public Distribution to dismantle the dominance of the politically powerful oligopoly of large-scale rice millers. Under that scheme, the rice brand Shakthi came into the market through the cooperative society Small and Medium-scale Rice Millers with the objective of providing rice at a reasonable price to consumers. Unfortunately, the progressive project was terminated once Gotabaya Rajapaksa became President, driven by the influence of conspiratorial rice millers like Dudley Siresena, et al.

Overcoming unscrupulous trade practices of the rice mafia requires a strong political will apart from progressive-minded, visionary political leaders like those who were involved with the Shakthi Rice venture. Sadly, such kind of politicians are few and far in the country.