Impending Rice Crisis in Sri Lanka

Despite setting a record-high minimum purchasing price for paddy, farmer non-compliance and the government's soft approach led to the total collapse of the government's 2024–25 Maha season paddy purchasing plan. The government/officials are now sitting ducks, waiting for the next supply squeeze engineered by mill owners.

⭕️ In early this year, Government set the minimum paddy purchasing price of Rs.120–132/kg for Maha season 2024–25. This converts to ~ Rs.250/kg rice price post-milling. Despite this above market rate, farmers did not sell to the Paddy Marketing Board (PMB).

⭕️ By late April 2025, with 90% of harvesting completed, the government has procured only 56,000 kg (56MT) - (~ 3 containers (TEUs)).

⭕️ For comparison, during the 2024 shortage (Dec–Jan), when the government allowed rice imports, 167,000 MT were imported (~8,000+ containers).

⭕️ Rs.5 billion was allocated for 2024–25 paddy purchasing. Only Rs.5 million was used (~0.1% utilization). With these numbers, the government has no cards in their hands when it comes to Q4.

⭕️ In January 2025, the government blamed the 2024 rice shortage on poor planning by the previous regime. Now, the current government faces the same result under their own policies.

⭕️ Root problem: Farmers rely heavily on private millers. Millers provide loans, purchase wet paddy without delay, and support community needs (such as funerals and local events). Farmers are reluctant to break this relationship.

⭕️ The so-called "rice mafia" isn't limited to millers—it's an entrenched ecosystem in which farmers are largely willing participants.

⭕️ Fertilizer, seeds, and water are subsidized to farmers with taxpayer money, but the public sees no benefit in stable prices or food supply. There is no incentive for farmers to comply with national procurement needs and no accountability for subsidized inputs.

⭕️ The government needs to act now: Start monitoring mill owners' stocks immediately, track what's going in and coming out, and keep them on a tight leash to ensure they release stock without creating artificial shortages.

⭕️ To prevent the impending crisis, the Government must allow rice imports now with higher duties above Rs. 65 to prevent Q4 shortage and port congestion just like last year. This will help mitigate Q4 shortages, panic buying, and port congestion like last year.

⭕️ Going forward, Government should drop the carrot and pick up the stick. No more unconditional subsidies if farmers are not willing to sell rice to the government.

#SriLanka #Rice