By Feizal Samath
COLOMBO, Sep 12 2003 (IPS)

Cafeterias in the Sri Lankan Parliament have been selling only rice, instead of bread or other wheat-based food, for all three meals in a day. Half-page newspaper advertisements, taken out by the Ministry of Mass Communications, have been urging people to eat more rice.

All government institutions, from the military to prisons to hospitals, are having to buy rice instead of flour, a good part of which is imported from abroad.

These are all part the government’s ‘Back to Rice’ campaign. It is designed to get Sri Lankans to consume more rice and help the farmer, beset by falling prices due to painful effects of news that is otherwise positive – the country’s first rice surplus.

This surplus has been boosted by a combination of better yields, good weather and prolonged peace in the country’s two-decade-old ethnic conflict. According to government figures, rice production is expected to show a record surplus of more than 200,000 tonnes this year, up from production of 2.8 million tonnes in 2002.

But it has also yielded a harvest of debt for farmers grappling with low prices and rising production costs of rice, the staple food.

As rice prices have plummeted, private traders are having a field day while government authorities struggle to deliver on promises to pay a better price per kilogramme of rice.

”The rice farmer has been betrayed, neglected and forgetten. The government and other authorities wake up only at harvesting time but our problems are of a more serious nature,” rues P M Gunaratne Bandara, a farmer from Welikanda in the north-eastern district of Polonnaruwa.

Bandara is one of many who left urban settlements and settled in dry zone regions in the late eighties to do agriculture, and says he thought the government would keep its promises of helping them.

But viewing the problem with rice as purely one of a surplus situation misses the real issue, argues Nimal Sanderatne, senior fellow at the Post-Graduate Institute of Agriculture at the University of Peradeniya in the central hilly town of Kandy.

Increased production does not even necessarily mean that Sri Lanka has become a paddy surplus country. ”We have a ‘surplus’ only because poor people do not have the money to purchase their requirements of the staple food,” he said in an interview.

The main problem, he says, is that marketing channels for farmers are inefficient and monopolised by traders who can drive down prices when production is high, and that farmers are unable to stock rice because of poor storage facilities.

”To view it as a huge problem if excess paddy production may mislead the country to counterproductive directions in the long run,” said Sanderatne, one of Sri Lanka’s most respected economists.

Meantime, farmers are panicking and have little choice but to sell to private traders at 10 rupees (about 10 U.S. cents) against 13 rupees (13.6 cents) promised by the state. There have also been reports of suicides by desperate farmers.

Agriculture Minister S B Dissanayake said he was worried that if local consumption of rice does not rise, the state-buying price may also fall below 13 rupees a kilogramme.

But Sarath Weerasena of the agriculture department says that Sri Lanka’s surplus is not as surprising or just mainly due to the weather and peace, since yields have been rising in decent decades. ”Paddy yields have increased by 100 percent over the past four decades and is growing,” he said.

He said that in the eastern province districts of Batticaloa and Ampara, the yields have increased to 120 bushels per acre from the average of 80 bushels. The current average is an increase from 20 bushels per acre, 40 years ago.

Yields in Sri Lanka are at four tonnes per hectare, which is third after Japan – six tonnes – and Indonesia 4.5 tonnes.

Indeed, bountiful harvests have been emerging around June for the first time in many years even in the north and east, severely affected by the civil conflict.

The per capita consumption of cereal-based foods in Sri Lanka is about 150 kilogrammes, 50 of which come from imported wheat, according to the state-run Industrial Technology Institute, which sees room to cut down on wheat imports and use more rice.

Its seven-point plan for the rice surplus includes a 10 to 20 percent input of rice flour in bread and other bakery products, and the substitution of rice for maize in complementary food for undernourished infants and pregnant and lactating mothers.

It also proposes the use of rice for the manufacture of a low-cost cereal food for infants, the substitution of wheat flour with rice flour for commercial manufacture of string hoppers, a local noodle-like food, and rice flour in breakfast cereals.

The government is also tackling the surplus situation by raising duties on imported rice.

In August, the Commerce Ministry resisted moves by the International Monetary Fund (IMF) to reduce taxes on imported agricultural products on the grounds that the local agriculture sector is uneconomical and inefficient.

Agencies like the IMF and World Bank have been advocating shifting from rice to other more viable crops or releasing land for industrialisation to address the surplus situation.

But Commerce Minister Ravi Karunanayake told a delegation led by IMF Sri Lanka representative Jeremy Carter that the government would not withdraw import tariffs on agro-based products, which are meant to protect local farmers.

On Aug. 19, he said that the government had a moral obligation to safeguard the livelihood of 1.4 million farmers. ”Protective tariff rates imposed by Sri Lanka are far more less than the grandiose agriculture subsidies and import taxes on agro-based products available in the western countries,” he said.

Meantime, low rice prices amid the surplus continue to make farmers’ economic environment more difficult.

Traditional lending agencies like banks have discontinued providing loans to farmers, because of their inability to pay back.

Many are now dependent on the moneylender or private trader who not only finances the cultivation, but also meets their other needs like a wedding or funeral and in return takes away the harvest. The cost of cultivating one acre of paddy is 20,000 rupees (210 dollars) to produce some 2,000 to 2,100 kg.

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