The Hon. Sunil Handunnetti - Minister of Industry and Entrepreneurship Development

¶ 01 Hon. Presiding Member, I thank Hon. Ranjith Madduma Bandara for bringing this pressing issue to Parliament’s attention. I have spoken on this before. As our State Minister R.M. Jayawardhana said, when our Government took office, we received the Lanka Sugar Company (Pvt.) Ltd as a heavily loss-making entity with accumulated losses of around Rs. 3 billion. In addition, when we took it over, there were 5.5 million litres of ethanol; 550,000 litres in stock; and 33,000 metric tons of sugar that could not be sold.

¶ 02 Hon. Madduma Bandara, you tried to say we imposed VAT and that caused sugar prices to rise. No. VAT was imposed by your former leader, President Ranil Wickremesinghe, on 1 January 2024.

¶ 03 Imports of ethanol were stopped by President Gotabaya Rajapaksa on 1 January 2020. After halting imports, demand rose for domestically produced ethanol, enabling payments to farmers. These institutions earn not mainly from sugar but from ethanol produced from molasses, a by-product of cane sugar production. Therefore, the cane price per ton rose from Rs. 3,000 to Rs. 5,500, then Rs. 7,850, and then to Rs. 10,000. When we assumed office, we paid Rs. 10,000 per ton of cane.

¶ 04 Yes, per ton. That is what people call the cane “hondara.” We cannot reduce that. As you also noted, the ethanol price had dropped to Rs. 475 per litre because maize and other inputs were used for ethanol. Those decisions were not taken by our National People’s Power Government alone; Rajapaksa–Wickremesinghe administrations also contributed.

¶ 05 You said there are two state sugar factories and Gal Oya is private. That is your perception. Gal Oya Sugar Factory is part of that sector; 51% is owned by the Government, yet they operate as if 100% private.

¶ 06 Management—yes. Such an agreement was signed under previous governments, not ours. We are now rectifying it. As we tried to systematically fix the institution, the very methods Hon. Rauff Hakeem described—sabotage and destruction—were used. Various attempts were made; we did not fall for them. Because we did not, they now say farmers have not been paid. We have paid all cutting and transport charges. What remains is the final payment. In recent days we paid Rs. 460 million from proceeds of our sugar sales. At yesterday’s Cabinet meeting, His Excellency the President intervened. The Treasury had earlier allocated Rs. 1,000 million; with the President’s and our State Minister’s personal intervention, Rs. 1 billion is now allocated to us.

¶ 07 After that allocation, the Opposition suddenly created narratives: that our ethanol contains urea, and that the Government plans to import ethanol. Why float both lines? On one side they say ethanol has urea; on the other, that ethanol will be imported. They expected we would sell ethanol at rock-bottom prices. I said in this Parliament that henceforth the three factories—Gal Oya, Ethimale/Sevanagala, and Pelwatte—will not sell ethanol below Rs. 800 per litre, even if someone exerts pressure. After we made that decision, they began claiming the Government would import ethanol and that our ethanol contains urea.

¶ 08 Hon. Presiding Member, I have with me a circular from the Department of Excise—Circular No. 04/2022—issued to all Excise officers, and daily reports from our institutional taste/quality inspectors. I table one for Hansard. None of these show the presence of urea. So why create these stories? To sabotage and run down the sector. An import order that was about to come was stopped because of these false claims. To the Opposition we say: you may clutch at straws, but these institutions will neither be sold nor closed, and ethanol will not be sold at cut prices. Nor will we reduce sugar by Rs. 200 plus VAT. None of that will change. All these institutions must work together—we have organized that and are doing so.

¶ 09 You said farmers are protesting. Let me cite one organizer: “Sameera,” who led a protest in Buttala yesterday. About 22 of those brought were from one political party group. Within the claimed 200, they were his people. Sameera is an elephant-fence contractor. He has 52 lorries and employs 300 workers. We owe him Rs. 9,813,793 and have already paid significant amounts: on 23.02.2025 we paid Rs. 907,000; then Rs. 387,000; then Rs. 553,000; and another Rs. 387,000. Yet he could not even bring his 300 workers to the protest. This is the sabotage clique within. Some are suppliers to the institution who play the role of “farmers” while trying to undermine it. We will not allow this.

¶ 10 Hon. Madduma Bandara, I know this A to Z, and I state here from Parliament: we will not allow this industry to be destroyed. As long as this Government and the President remain, no one will be allowed to topple Lanka Sugar Company (Pvt.) Ltd or the sugar industry. That is the truth. We thank the farmers and workers who bore hardships, heeded our request, and did not take to the streets; and our management and executive staff, including the Chairperson and the CEO, who have been maligned. Social media has hurled abuse—baseless claims even about the Ethimale CEO’s spouse working at the Bribery Commission—just to create a smear. As Hon. Rauff Hakeem said, the plan is to capture everything into one network. It would be easy to say, “Give it to so-and-so; keep it in a trust,” and then there would be no problems—no “urea” in our ethanol, no sales issues. Someone even offered to buy all ethanol at Rs. 800 per litre if we allowed use of the state brand and insignia.

¶ 11 In the past we had “Gal Oya Gal Arrack” and “Sanstha Arrack.” That is their game: use the state brand. I reminded them how, when the cement company was privatized, it was sold under the “Sanstha Cement” name. Now they want the same—if we allow the brand and crest, suddenly there is no ethanol “problem,” and they will buy regardless of alleged urea content.

¶ 12 I am grateful to the people who survive by pawning their goods, who live with a kerosene lamp. Hon. Presiding Member, cane farmers have no other livelihood—only if they can deliver cane to the factory can they live and send their children to school. We understand this. When cutting and transport payments fall due, although we pay Rs. 10,000 per ton, we cannot pay the entire amount at once—we must first sell stock. Meanwhile, we must pay cutting and transport for the farmer and worker, otherwise they cannot return with cane next season. When the time comes to make the final payment, these groups incite protests, saying 20,000 metric tons are in stock and demanding we sell at any price. If we sell sugar at Rs. 175, we fall back into debt to banks and the Government—selling cheap from both ends while leasing out estates.

¶ 13 You know cane is cut only in Yala and Maha seasons. If we have no cash for cutting then, we must borrow. The President and the Finance Ministry have understood this and granted relief. From a difficult period we have come up; we now have Rs. 1 billion. Thus we will grant relief to farmers and consumers, protect the industry, and uplift sugar production. This relief is valuable. But I state: we will not reduce ethanol by even one rupee; there is no decision to import ethanol; whatever conspiracies, we will not shut these institutions. We will not sack employees, nor recruit new ones; for two years, no new recruitments.

¶ 14 As you said, land rights should be given to farmers; allow cultivation in off-seasons. Hon. State Minister R.M. Jayawardhana, please take such decisions at the District Coordinating Committee. To break the monopoly and free farmers from modern bondage, we must act. Some have been assaulted; some farmers’ lands have been set on fire; the police have refused to take complaints. This thuggery is used to seize land and subject the Wellassa farming community to modern servitude. We will not allow it. These institutions will not be closed or sold; ethanol will not be imported; prices will not be reduced. We will launch a proper distribution process to break the mafia and provide sugar to ordinary people. The Government has made those decisions. This is a good case study on protecting people’s rights. Those in the ethanol and arrack businesses, and those eyeing institutions, land and stocks, should know: the National People’s Power Government will not allow such practices.

¶ 15 Hon. Ranjith Madduma Bandara, thank you again for drawing the House’s attention to this matter.

¶ 16 Thank you.