In today’s (3rd October 2012) Daily News it was reported that subsequent to the Yala Season harvest only 65 Tonnes of paddy have been purchased by the PMB from the Polonnaruwa District. There is no reason given as to why this amount is so low. Is it because the farmers just had no surplus paddy to sell the state? No explanations are given except for the facts.
Subsequent to last season’s bumper harvest, there was a lot of paddy in storage, as a result of the state purchasing and filling the various storage warehouses. Some of this paddy has been sold at a price lower than the state purchase price to local millers, whilst the bulk of it still remains in storage.
The state is manipulating the price. That is by not releasing the stock in the silos, and the small crop this season, a shortage of paddy has resulted. This has raised the farm gate price, a boon to the farmer, though his crop is a fraction of the previous season and is small comfort. This is the simple reason why the state has not been able to purchase the paddy. It is not worth their while for the farmers to take the paddy to the state buyers, when they can get a higher price at the fields from traders. For those in the know, a three bushel paddy bag of nadu rice sells for Rs2200 and for the samba white it is Rs2400 the latter at Rs 38/kg when the govt. purchase price is Rs30/kg. I am told the price is on the way up.
It is important now that the state does not play games with manipulating stock of rice in stores to raise the price, so as to release an excess only to fall again. In the same vein the state can create an artificial shortage by not releasing rice from their stores increasing the market price. This will help the large millers more than anyone else to increase their price, and dupe ruined marginal farmers who have decided to abandon paddy cultivation, to get back into the Maha season!
What this does is enrich the millers and make an already poor paddy farmer even poorer, cheated by a false sense of security. Please do not forget that traders make profits on the changing price of paddy. The farmers dispose of it at whatever price they can get, as they have to turn their harvest into cash. They cannot afford the luxury of storing it until the prices rise, unlike the rich traders and millers. The state is playing the enabler yet again, on behalf of these unscrupulous traders who profit from this turn of events. The customer now has to pay a higher price for rice, even though there are thousands of tons of rice rotting in the government stores, not being sold(why?). This sort of behavior by the Govt. is unpardonable, as I can see the farmers’ desire to farm, daily diminishes by such State in/action.