Govt. approves Rs. 100 b in loans for paddy purchases

Friday, 24 January 2020 00:25 -     - {{hitsCtrl.values.hits}}



  • Private buyers and mill owners can obtain loans at 8% interest to buy paddy at Govt. set prices 
  • Cabinet approves minimum price at Rs. 50 per kilo 
  • Three million metric tons of paddy expected for Maha season
  • State Ministers appointed to monitor paddy purchasing in key districts   

By Uditha Jayasinghe 

Cabinet has approved a wide-ranging paddy purchasing program for three million metric tons of Maha season paddy, which includes setting a minimum price of Rs. 50 and providing Rs. 100 billion in loans at 8% interest for private buyers, a top official said yesterday.    

Paddy harvesting has already begun and the Cabinet of Ministers this week decided that the Government will mediate in purchasing surplus of paddy stocks in the Maha season of 2019/2020 with objective of encouraging the private sector paddy millers to purchase paddy under a fair price to ensure sustaining a fixed price of paddy. 

Therefore a minimum certified price of Rs. 50 for a kilo of paddy with the due standard (subject to the criterion of moisture) has been mandated. The minimum certified price of a kilo of paddy with moisture is to be certified at Rs. 45.

“Cabinet has also approved giving loans through State and private banks approximately amounting to Rs. 100 billion under a concessionary loan interest rate of 8% for private sector buyers including small and medium scale as well as large scale millers for the purchase of paddy under the certified price,” Cabinet Spokesman Bandula Gunawardena told media.

He also defended the high prices of rice that have been seen in the market for the last few months, insisting that the Government had decided not to import rice as it could cause market distortions as it was too close to harvest time. 

“During the previous Government we saw that every time prices increased they would resort to imports, but this is bad on two counts. One is that previous foreign exchange flows out of the country and secondly when rice imports are made so close to harvest time it drives down prices and farmers close the opportunity to get a good price. This is the Government that is on the side of the farmers, so the decision was taken not to import rice but to wait till the Maha season,” he said. 

The Government program to purchase rice will be carried out through district secretaries and Government agents as well as the Paddy Marketing Board (PMB). Direct purchase of quantities of rice required for Government institutions such as the armed forces, Department of Prisons, public hospitals and other public institutions will be done directly from Paddy Marketing Board (PMB).

Cabinet also decided all store houses or warehouses under the purview of the Food Commission will be used for storing the paddy stocks purchased. Lorries and trucks belonging to the Government will be used for transportation of paddy stocks

Monitoring of the paddy purchasing program in the Districts of Polonnaruwa, Anuradhapura, Kurunegala, Vavuniya, Ampara, Batticaloa, Monaragala and Hambantota has been assigned to several State ministers.