It is tragic that even after 76 years of Independence, Sri Lankan rice farmers are still mired in a Government subsidy-dependent economy. They have had to face many problems in cultivating their small farms. The main issues that have led to the rapid increase in production costs are land preparation, seed paddy, chemical fertiliser, agrochemicals and labour costs. Also, the lack of timely irrigation water, rainfall, and the failure to apply fertiliser and agrochemicals to the fields in cultivated tracts have led to a decrease in the paddy harvests.
Also, the fact that the profit from the sale of paddy is not sufficient to lift them out of the subsistence economic situation due to the addition of harvesting and drying to the production cost, can be described as a major economic problem facing our country.
Storage facilities
Every Government so far has increased subsidies to address this issue, considering it as a solution, but it appears that it has only exacerbated the problem and not really provided a viable solution. Over the past 40 years, large-scale rice producers have contributed by introducing their paddy harvest as higher quality rice to the market. This is due to their use of modern storage facilities and techniques. Also, during the Covid-19 pandemic and when the economy was declared bankrupt, the provision of rice, the country’s staple food, without any shortage was a great contribution they made to the economy.
Unfortunately, these few large-scale rice producers have created a rice oligopoly, causing inconvenience to consumers and a headache for every Government since Independence in 1948. However, a Government cannot ignore their contribution as they are major stakeholders in the rice production process that the country needs.
The Government-run Paddy Marketing Board (PMB), which was established to address the problem of paddy and rice prices, has exacerbated the problem due to political interference, corruption, inefficiency, and outdated storage technology at its many warehouses countrywide. Therefore, it must be clearly stated that the problem will not be solved by re-applying the method that every Government has used as a solution so far, i.e. increasing subsidies.
Is there no alternative method to this problem? The basic problem with small-scale farms is that the use of modern, efficient, technological machinery is difficult and costly, resulting in high production costs and, therefore, the lack of results for the efforts, which has caused the economy of the small farmer to remain at the subsistence level.
The recent rice crisis shows that the shortage of each type of rice in the market is due to the supply not meeting demand, as different consumer groups are accustomed to using Nadu (red sand white), Kekulu (red and white), Samba, Keeri Samba and other types of local rice. Only affluent sections of society can enjoy imported Basmati rice.
Also, since the cost of production and the timeframe for rice to reach the market differ when cultivating short-term and long-term rice varieties, these factors should also be taken into account when considering rice demand and supply. Therefore, it is essential to balance demand and supply over a year by considering consumer demand for various types of local rice, determining the price of rice in relation to the cost of production, and storing excess production.
By coordinating with the Department of Agriculture, Hector Kobbekaduwa Agricultural Research and Training Institute (HARTI), Agricultural Extension and Grama Niladharis as stakeholders, it will be possible to obtain an answer to this question by obtaining the necessary field and marketing data and regulating paddy production.
Cooperative model
To solve this problem, the Government and all stakeholders must work together. How can the economic inefficiency of small farmers be overcome? If all farmers at the farm level act together as partners in a corporate body, they will become shareholders based on the size of their land. If such a cooperative model happens, cultivation can be done more efficiently by consolidating lands and using large-scale technology.
The mechanisation of planting, fertiliser and agrochemical applications, and more efficient and simultaneous application of fertilisers and agrochemicals through advanced drone technology can minimise the damage caused by pests. By efficiently harvesting the harvest that can be obtained through proper water management, shareholders’ dividends will be increased.
How can large-scale rice producers be involved in this? The Government can intervene and use the modern storage facilities of large-scale rice producers to store the harvest from the collective enterprise as a rice reserve, using them as partners. Otherwise, the corporate body itself can become more competitive in the market by using modern storage facilities and rice processing machinery. The Government can provide the basic facilities for this on a concessionary basis. Small and medium-sized rice mill owners can also be involved in rice processing.
What should be the role of the PMB in this process? By regulating the fair distribution of the country’s stored rice reserves among the processing stakeholders and using the storage facilities available to producers, competition in the market can be allowed. Their role should also be to provide information to the Government on the production potential and deficits in formulating Government policies to ensure food security in the country.
What is the role of shareholders in a joint venture? In addition to being shareholders, they can participate in activities when human labour is needed and earn an additional income. The success of the business can be ensured by employing a responsible group of shareholders who have a good knowledge of modern agriculture. This management team can also allow shareholders with experience in rice cultivation to participate. Other stakeholders can make arrangements to generate additional income by cultivating farmland and homesteads outside of paddy production.
This proposed methodology can be tested first at the field level of a given irrigation project to measure its success, and then expanded to other irrigation projects. If it is successful, the Government will be able to gradually move away from providing ineffective subsidies and small farmers will gradually be able to stand on their own two feet without any subsidies.
