The Hon. Wasantha Samarasinghe - Minister of Trade, Commerce, Food Security and Cooperative Development

¶ 01 Madam Deputy Chairperson of Committees, I thank Hon. Rohana Bandara for the motion on formulating a programme to maintain Government buffer stocks of rice. We will consider all views expressed. In debates over the past two months, we have clearly stated the challenges a country like ours faces, whose people typically eat rice two out of three daily meals. Accordingly, we presented the Government’s plan and forthcoming actions to secure rice availability and affordability without market shocks.

¶ 02 Because of this motion, I will elaborate further. The Government is already implementing its programme, covering multiple avenues to ensure consumers get rice without price spikes. We are a two-season cultivating country; several of our colleagues who led farmer organizations now serve as ministers and MPs and contributed to setting a fair guaranteed paddy price. Some in the Opposition and allied groups reject it, but farmers are accepting it.

¶ 03 If we raised paddy prices excessively, the retail price of rice would surge. From 8 kg of Nadu paddy costing Rs. 1,200, milling costs about Rs. 192; thus, we aim to keep rice below Rs. 230 per kg. About 65% of our consumption is Nadu; maintaining its price is critical.

¶ 04 For Maha 2024–2025, we initially expected around 3 million metric tons of paddy in Maha, and if the total annual harvest reaches 4.5–4.6 million metric tons, we would produce roughly 3 million metric tons of rice this year. National rice demand is about 2.4 million metric tons (including wheat flour substitutes), with some paddy for animal feed and about 20,000 metric tons for beer. Although legally rice should not be diverted, it occurs because we are self-sufficient in rice.

¶ 05 We once had a major state milling and storage system: for instance, behind the Galgamuwa station there are silos that can store about 30,000 metric tons of rice; another 30,000 mt capacity exists near Polonnaruwa hospital toward Onegama, parts of which are now used by a garment factory. Large private millers now handle around 30% of purchases; small and medium millers handle about 35%, and roughly 30% remains stored at household level. The Government plans to purchase about 10% of the season’s paddy to help stabilize the market—hence questions about using only Rs. 5 billion.

¶ 06 The Treasury has allocated Rs. 5 billion to the Paddy Marketing Board—enough to buy around 40,000 metric tons at prevailing prices—but procurement will also be financed beyond Treasury funds. Banks provide pledge loans to the private sector for paddy buying; we are coordinating SATOSA, cooperatives, and the PMB. Through Bank of Ceylon, we are arranging a Rs. 10 billion pledge loan for SATOSA and plan to procure up to 100,000 metric tons for SATOSA. PMB has 36 stores opened nationwide; paddy purchases at PMB stores commence on the 7th. Our target is to procure about 10% of the season.

¶ 07 Regarding storage form: it is preferable to store as paddy, not milled rice, for food security. Paddy’s quality improves slightly with aging; milling conversion can be done within 24 hours. Best practice is silo storage with moisture below 14% and cooling systems. We are calling tenders to engage private mills to supply up to 600,000 kg of rice per day to SATOSA. We also intend to restart Government mills to supply up to 1.5 million kg of rice per day. We will procure 10–15% through SATOSA and PMB, mill, and sell via SATOSA and cooperatives at below prevailing market prices. Milling generates by-products (e.g., bran) that also help reduce effective costs. The Government is focused on these measures to prevent renewed market turbulence.

¶ 08 Recent floods may reduce Maha paddy output to about 2.6 million metric tons. We are preparing to bridge the shortfall in Yala—working with the Agriculture Department and Ministry to expand cultivated area and raise Yala production from the earlier estimate of 2.1 million to 2.6 million metric tons, targeting a total of about 5 million mt of paddy this year if conditions permit.

¶ 09 We appreciate the interest shown and assure the House that the Government is proceeding with procurement, storage, milling, and timely market release to correct imbalances. Thank you.