Monday, December 15, 2014

15th December (Monday),2014 Daily Global Rice E-Newsletter by Riceplus Magazine

Commodities Go From Hoard to Floored

By JUSTIN LAHART Dec. 14, 2014 2:06 p.m. ET
In understanding the latest commodities selloff centered on oil, consider a raw material lurking in your kitchen: rice.Economists think stockpiling plays a big role in commodity bubbles, but are only now getting the evidence needed to understand exactly how it works.
One implication of what they are learning: Prices haven’t bottomed yet.A standard theory of how commodity bubbles form begins with an imbalance between supply and demand. This raises prices and prompts some stockpiling, due either to worries about having enough or hopes of selling for more in the future. This curbs supply further, pushing prices higher still. Cautionary stockpiling morphs into hoarding, and the bubble inflates.
Yet it is hard to see exactly how these bubbles play out, says Princeton University economist Harrison Hong, as commodity markets are complex networks of suppliers, middlemen and consumers.When cotton hit 140-year highs in 2011, it was clear hoarding was happening, but nobody knew how much. Big producers including India and Brazil didn’t provide stockpile data. When The Wall Street Journal visited China’s Shandong province that January, farmers were storing thousands of pounds of cotton in their homes. Cotton has fallen about 70% from its peak.Recently, though, researchers have accessed a huge data set on consumer behavior.
For the Nielsen Homescan Panel, a partnership between Nielsen and the University of Chicago Booth School of Business, 100,000 U.S. households record the bar codes on every packaged item they buy.Working with University College London economist Áureo de Paula and New York University economist Vishal Singh, Mr. Hong used the Homescan data to examine another bubble, in rice. This started in late 2007 when India, worried about food security, banned rice exports. Fears of shortages emerged and panic buying ensued.

The U.S. didn’t face a rice shortage, but prices still shot higher, and people started to hoard. Costco Wholesale and Sam’s Club evenstarted rationing bulk purchases.The economists found some surprises. For example, while one might think lower-income households are more prone to panic over rising prices, those with higher incomes hoarded the most. Maybe they watched the news more closely or just had more money to buy rice.
The really odd thing was that a bunch of households who hadn’t bought rice before did so during the crisis, then never did again. They may have been reselling it, but more likely is that they just got swept up by the situation. Rice prices have fallen by roughly half since early 2008.The takeaway: Commodity bubbles feed on irrational behavior and don’t last forever. Eventually, high prices encourage lower consumption and more supply. Prices ease, and stockpiles are run down. Middlemen who were looking to profit on perceived shortages start selling to limit losses.
Maybe they weren’t in a bubble, but the two largest commodity producing industries, oil and steel, are seeing something like that now as prices for crude and iron ore, used to make steel, tumble.Now, imagine there was a bit more than just ordinary stockpiling going on.
Driven by expectations that rising global consumption would keep outstripping supply, people got swept up into the same sort of scarcity mind-set as those peculiar rice hoarders.Certainly, iron ore and other metals played a significant part as speculative collateral in the rapid boom in “shadow lending” in China that Beijing is now squeezing. In the U.S., there was an expensive land grab by exploration and production companies, financed by everyone from regional banks to private-equity firms, convinced that triple-digit oil was a given. That is now teeing up a potential crisis in the high-yield bond market.As reality sinks back in, it is possible prices have a lot further to fall.
Sacks of rice at a grain market in India. When the nation banned rice exports in 2007, it kicked off a price bubble which offered academics clues about how other commodities bubbles work. REUTERS
Write to Justin Lahart at

Gov’t seeks private sector rice importers under MAV scheme

THE NATIONAL Food Authority (NFA) has started accepting applications from the private sector to bring in a total of 187,000 metric tons (MT) of rice under the country’s 350,000-MT minimum access volume (MAV) commitment for 2014.
In a circular published in a newspaper on Saturday, the state grains agency issued guidelines for importation of well-milled rice under the MAV Omnibus Origin Rice Importation Program.Under its commitment to the World Trade Organization as part of concessions for its special treatment on rice, the Philippines was to import a total of 350,000 MT of the grain under the MAV scheme this year. Some 163,000 MT fall under the MAV-Country Specific Quota (CSQ), while the balance falls under the Omnibus Origin category. NFA data showed that a total of 114,000 MT of rice have been imported as of Dec. 9 under the CSQ.

The issuance was “in line with government’s policy of allowing the private sector to participate in rice importation.”The NFA said qualified importers can bring in up to 5,000 MT each. There will be no required minimum volume and rice can be imported from any country.Neither will the agency give extra import allocation once the 187,000-MT total will have been reached.
“All rice to be imported under this program shall be levied a 40% tariff, to be paid in advance with the Land Bank of the Philippines,” the circular read. “Final assessment shall be made by the Bureau of Customs (BoC).
”NFA further said that only high-value rice varieties are allowed to be imported.Interested NFA-licensed importers will have to submit documents required and pay P20,000 non-refundable processing fee between Dec. 28 and Jan. 31.Documents required consist of letter of intent (LoI), NFA import license valid until Dec. 31, certificate of accreditation, as well as BoC-issued clearance on absence of pending administrative or criminal case.There are also specific documents required of each type of business (corporation/partnership, sole proprietorship, farmers’ cooperative or organization, etc.)

Interested parties are also required to submit technical and financial documents.
“Applicant/importer who submits incomplete documents shall not be accepted using... pass-or-fail criteria,” the circular read.An MAV prequalification team, which will check all submitted documents, will endorse applicants to the NFA Administrator within 10 days of receipt of application.The NFA chief will then issue a certificate of eligibility (CoE) to the importer that will specify volume to be imported based on the LoI as well as duty and tariff to be paid.

Within 15 days from receipt of CoE, the importer should submit the document to the Land Bank’s International Trade Department and pay the duty and tariff at any Land Bank branch.Seven days thereafter, Land Bank will then send a written notice to NFA’s Grains Marketing Operations Department that will specify volume and variety of grains to be imported, schedule of arrival, cargo type and port.An import permit can be obtained upon submission of shipping documents prior to arrival. The permit will be issued upon payment of P2,000 processing fee.

“NFA shall publish a list of importers issued the import permit, indicating the volume and the country of origin, on the NFA Web site...,” the circular read.Shipments should arrive by Feb. 28.The grains agency said “95% arrival of the importer’s authorized import quota shall mean substantial compliance with the allocated volume.”“Failure to meet substantial compliance [sic] for the arrival of the allocated importations... shall disqualify the importer from future importation programs of the NFA.”However, in the event of force majeure, an importer can ask for extension of the import permit’s validity and arrival period, which however should not exceed 15 days.Importers seeking more time should submit a written notice, explaining justification, within five days of force majeure occurrence.

“The NFA Administrator shall decide within three days from receipt of the written [notice]; otherwise, it shall be deemed approved,” the guidelines read.The NFA identified Poro Point in La Union; Batangas; Iloilo; Bacolod; Zambonga City; Subic, Zambales; Tabaco and Legazpi in Albay; Cebu; Cagayan de Oro; Port of Manila and Manila International Container Port; General Santos City and Davao City as ports for the program.

The grains agency said it can revoke, cancel or suspend a CoE or an import permit due to involvement in illegal entry of rice or hoarding.Quantitative restrictions (QR) on rice -- which should have expired in 2012 -- were extended to 2017, according to Agriculture officials last June. As part of the continued QR on rice, the Philippines has committed to cut tariff under the scheme starting July 2015. The current tariff of 40% on MAV shipments up to 350,000 MT will be cut to 35% and for a larger volume of 805,200 MT. Purchases beyond that will be subject to a 50% rate. -- Claire-Ann Marie C. Feliciano

Rice prices expected to fall 10% in Kingdom

Published — Monday 15 December 2014
Last update 14 December 2014 11:26 pm
A prominent rice importer has predicted that rice prices in the Kingdom are expected to go down by 5-10 percent in the coming months, local media said.Meanwhile, an Indian rice dealer told the media that rice prices in India have remained stabilized for the last period and, therefore, alleged price hikes in the Saudi markets are unjustified.Mandeep Singh Bindra, an Indian rice dealer and a key figure in the Emirates Grain Products Company (LLC), ruled out any price hikes in India as production is nearing 90 million tons and growing remarkably.

Saudi Arabia's rice imports from India are ranging between 1.5-2 million tons annually and imports are poised to grow, Bindra told Al-Eqitsadiah daily.India rice exports to the Kingdom account for 20 percent of the Indian total exports to all countries, he said.For his part, Mohamed Abdulrahman Al-Shaalan, one of the key rice importers, said rice prices have stabilized since last Ramadan with minor price reduction levels in some parts of the year.He said the majority of the Kingdom’s rice imports from India is “Besmati” brand which represents 70-80 percent of the overall imports. 

Al-Shaalan said Indian rice production in the current season was good with surpluses reaching 20 percent compared to last year’s production levels. He affirmed investment relations with their Indian counterparts were excellent and refuted alleged price exaggerations by the Indian traders.Saudi markets are expected to witness a remarkable stability in rice prices over the coming months with a decline to range between 5-10 percent on the back of oil price falls, he said.

We’ve invested over $1bn to achieve self-sufficiency in rice production–Owoeye, Elephant Group boss

In its effort to discourage rice smuggling and boost local production and investment in its value chain through backward integration, President Goodluck Jonathan in May this year approved the 2014-2017 Fiscal Policy Measure on Rice.The new fiscal policy, which was a review of the 2013 Fiscal Policy Mea­sure significantly reduced the levy on husked brown and semi-milled or wholly milled rice to 10 per cent duty and 20 per cent levy for investors with rice milling capacity from 100 per cent that obtained in the former fiscal policy.
 But for pure traders, government reduced the levy to only 10 per cent duty and 60 per cent from 100 per cent. The policy was also to significantly boost food security.Before the policy came into place, Nigeria has been a net importer and highest consumer of imported rice in Africa as statistics from the Federal Ministry of Agriculture show that she spends N356 billion yearly on rice importation.But Tunji Owoeye, Managing Director of the Elephant Group, with presence in Nigeria, Senegal, Ghana, Cameroon and Niger Republic and the National President of the Rice Millers, Importers and Distributors Association of Nigeria (RMIDAN), said this would soon become his­tory as local manufacturers gear up towards bridging the gap.
According to him, the Federal Gov­ernment’s backward integration has had a lot of positive impact on the local manufacturers, who hitherto were importers, but have now gone into full production.He speaks more on the collabo­ration with government and other stakeholders, and the country’s future in rice production.
Impact of government’s policy on backward integration
Without doubt, government’s policy on backward inte­gration has had a lot of positive im­pact on the industry. Impact in the sense that it has prompted us into ensuring that we take seriously the aspect of production and processing as against huge reliance on importa­tion of commodities. In the last two years, government has been consistent in the campaign of its ag­ricultural transformation.
Take the rice issue, for instance, we all know there is a gap between production and consumption, so what govern­ment has done through the Minister of Agriculture, Dr. Akinwumi Ad­esina, is to ensure that we are given incentives that will encourage us to go into backward integration and I must tell you at this stage that this is really working.
As the Chairman and President of RMIAN, one has seen a lot of increase in the invest­ments by our members in both local production and processing. In the last two years, our members have seriously taken up additional invest­ments in increasing their milling and production capacity, so I think it is working.Some people have said that the government’s backward integra­tion policy has created an avenue for people to take advantage of the loopholes in the policy to smuggle in rice from neighbouring countries and as an association, we also saw it from that perspective. But as we began to work with government in the areas of border strengthening and policy reviews, we’ve seen a lot of improvement.
I will tell you what it was in January 2013 is not the same story today. Yes, when the policy was changed, there were a lot of bombardments at the border flanks, especially Niger Republic, Benin Republic and Cameroon. But government has been proactive, I must tell you, by working closely and seriously with the association on the policy in terms of building structures that would work. You would have seen that government, within the last 18 months, has moved away from the 100 per cent levy, back to 60 per cent levy, so I give kudos to them for being proac­tive and sensitive to the dynamics of our market and we have adjusted to suit the challenges we face.The issue of smuggling is a hydra-headed monster, not only in rice but in all commodities. You will find the same problem in veg­etable oil, sugar, auto, cement and other commodities. I think that in as much as government is sensitive and proactive, we will get the re­sults and that seems to be the case.
Without patronising government, I must salute the efforts of the Minis­ters of Agriculture; Industry, Trade and Investment and the Coordinat­ing Minister of the Economy and Minister of Finance for accepting to take a second look at review­ing the rice policy. The policy has been reviewed and is now double pronged in the sense that for inves­tors investing in the value chain, there are additional incentives. This is attracting additional capital investment from industry players away from just trading.Also, smuggling is being ad­dressed by policy adjustments and the Customs have been proactive as well.
This year, we’ve seen Customs taking pains to go through every document of goods in transit, which has really put a lot of fear into smugglers. When you see things happening positively in our environment, one has to commend it. Indeed, it is not everything that is happening in Nigeria that is negative. I have seen over the last few months that government has done remarkably well in the area of revision and implementation of the rice policy in the country and I can tell you that we are beginning to see the results in terms of invest­ments and in terms of acreage.
For a company like ours, the Elephant Group, it was not part of our aspira­tion to go into rice production but today, we are in our third harvest and we are growing rice in about three states and we have thousands of out-growers, as well as a lot of communities that we have adopted and there are other competitors in the industry that are doing the same thing, which is helping the people of these communities in gainful employment.
Meeting local demand
No! Millers have not been able to meet the demand of rice in the country and that is why you have the demand gap. And government in the new policy has identified the need to allow imports for the shortfall between consumption and local production. I must thank government that they gave us the opportunity to partake in the committee, so we are also contributing to the policy that af­fects us as players in the industry. We have also assured government that we would take ownership for the success or failure of this policy, because they allowed us to come and propose what we think is work­able and I think this is noble.
Public, private sector partner­ship
As a private sector company in the agriculture business in Africa, we welcome the president’s transformation agenda. Since the new government started, policy structures have been developed although there are limitations as to how far we can go at the moment, because of non-existent infrastruc­ture. We have seen that govern­ment is interested in supporting the efficiencies of value chain in agriculture.Since this government came into power, it has not been part of the procurement, having left it to the private sector. That gives serious operators in this business the op­portunity to integrate and expand the market and put themselves out there and gain more market share. We need government to work much more closely with operators to develop the value chain together. Within six to eight years, we can get to our destination but not within the tenure of the present govern­ment.
Marketing of smuggled prod­ucts
There was a period when we alerted them not to support smugglers to distribute smuggled goods and it was something they took in good stride. I must com­mend them as well that the situation is getting better by the day. They are part of the value chain because they ensure that the goods get to the consumers. We engage them regularly to enable them access in­formation, and our relationship with them has been quite cordial. We cannot work without them and they cannot work without us.
Together we have been working to ensure that government’s target of rice sufficiency set for the country is feasible. From both the theoretical and practical perspectives of setting targets, these are meant to be reviewed periodically. The target for rice sufficiency in 2015, I think, was set three years ago, but there have been some setbacks in the area of smuggling, which government has addressed by amendment of the policy. I think the target should be revised and I’m sure that in the next three years, if the organised private sector continues to go at the pace we are going and given consistency in government’s policy, with the passion and the level of investment we have committed, we should be close to the target. And I think that is not a serious departure from what govern­ment has said originally.
Govt investment in rice production.
With what we have seen from our members in the last one year, the investment has been in excess of $1 billion. I can tell you that the market is adapting well to homegrown rice. Both the homegrown and foreign-grown rice come in the form of paddy. I think the only difference between them is the level of sophistication of processing, which is also being corrected in Nigeria, because some of the mills we use today come from renowned equipment manufacturers that other nations we are importing from are using.
For instance, in Thailand and India, most of these machines are from similar manufacturers, but the level of sophistication in the polishing and de-stoning is the main difference. However, most of the mill­ers today are beginning to install good equipment and de-stoning machines to be globally competitive. If you go to the factories of some of our members and see the rice produced and then com­pare it with what is being imported, you will discover that there is no difference, as the homegrown rice is as competitive as what we bring in and I believe we have re­ally moved up.
Fluctuations in price of rice at Christmas and new year
Generally, prices are dictated by the forces of demand and supply. Internationally, we have seen what is happening in other countries. For instance, Thailand is sitting on more than 20 million metric tons inventory of rice over the last two years, same as India, while Vietnam and Brazil are also shoring up their capac­ity. I think because there is a lot of production going on and also imports, the prices will not necessarily be out of reach, as our members who are producers and those who only import always plan for this period and if you put both together, I don’t think there will be any serious threat with regard to price increase.
How to make agriculture attractive to youths
Given its not too en­couraging disposition to agriculture, part of what Elephant Group has done is to conduct a lot of training for agro entrepreneurs across Nigeria and some African countries where it has opera­tions and the idea is just to sensitise young school leav­ers to embrace agriculture as a business. You must have noticed that there is a group of agro entrepreneurs in the country. It is a massive group put together by government.
Also, President Goodluck Jonathan has created an arm in the Presidency being su­pervised by Mrs. Barka Sani, a Senior Special Assistant to increase the level of agricul­ture awareness in schools. This will not only sensitise young school leavers, but also help them to develop in­terest while still in secondary school and maybe influence their decisions in going into agriculture. Because they will be made to see that they can make money in agricul­tural endeavours like fishery, cassava, timber, rice, cocoa to mention a few.
Under the programme, as companies and agribusi­ness ambassadors, we will be adopting schools across the country, encouraging them to grow what is found in the region on their school farms, supporting them with money and at the same time mentoring them. I believe that once this is in place and is sustained, it has the potential to displace some white collar career choices among our teeming youths. Just like it used to be in those days when cocoa was booming, you find young school leavers not taking up paid employment but rather preferring to be local buying agents for cocoa because they knew it would fetch them more money. So we are coming back to such a time again when the opportuni­ties in the agricultural value chain will be seen to be more profitable than white collar jobs.
Expectation from agric-based firms going forward
We see a lot of compa­nies, even the new ones that are coming into agribusiness moving from small companies to medium companies to large compa­nies and to public quoted companies. Before now, most parents never wanted their children to become farmers, but with million­aires and billionaires spring­ing up from the agricultural sector, shouldn’t the message be changed to reflect the trend? First, let us not lose cognisance of the fact that there is need for us to acquire basic education, because education is key in the prac­tice of agriculture today. You could be a medical doctor, an engineer or a lawyer.
I am a chartered accountant, it doesn’t stop you excelling in agriculture. So what we are saying is that irrespective of your background, we should all embrace agriculture as a way of life, and will deliver decent profits to us. Our dreams, while we were in school, were not to go into agriculture as many people were running away from it. But we found opportunities in agriculture and came back to it irrespective of our pro­fessional backgrounds and we have no regrets. I want to encourage every Nigerian and African youth that farm­ing is not for the poor and ignorant. It is a profession that can lead to extreme pros­perity and it is something that we all can do.
Our main aspirations are to feed our people and to increase the number of people we engage in employment. As a company, we want to increase our em­ployment numbers and that gives us a lot of joy when we are able to support the government in taking people out of the street, especially serious-minded, disciplined people.
We also want to ensure that our products are avail­able in all parts of Nigeria and Africa and we consis­tently have been doing this. As a company, we also ensure that the quality of our products rival the best you can get anywhere. We want farmers to come back, we want traders to come back and tell us that, oh, this is what we bought from you and it gave us increased output – all this will give us joy.
Nigeria’s pov­erty challenge
Frankly, pov­erty level in Africa is still high and I think Nigeria is one of the best numbers we have in the continent, though I think as Nigerians and Af­ricans, we have responsibil­ity to make a bold statement to the world. In the sense that the only place you have land bank in the world today is in Africa and when you say Af­rica, of course, you know the place of Nigeria in Africa. So when you are talking of poverty alleviation, I think with the kind of seriousness the government has shown towards agricultural trans­formation and with the op­portunity afforded us by the huge acreage of arable land in Nigeria, which I believe is the single most important factor in poverty alleviation, it can be attained.
We are delighted that government has taken a second step in supporting agribusiness because we quickly need to move away from subsistence agriculture to mechanised plantations. That is why the kind of new policies the gov­ernment is churning out with incentives to investors along the value chains are helping to encourage companies like ours to invest more money into agriculture. In as much as we keep having these kinds of policies that attract investments, what we need to do is to amend the Land Use Act, which I think shouldn’t be a problem given that we already have a land bank and in a few years the issue of poverty can be considerably addressed.
Corporate social respon­sibility programmes
The benefit for this company is that we have been able to em­power more people and we have been able to increase production. We are an input company, so they have increased production and yields, and they are able to take care of themselves. At the end of the day, we will be able to put them all together, process and convert them into finished products via backward integration. Whichever way you look at it, it is a win-win situation for us.
We see ourselves as Africans with an objective to empower Africans and train and develop African entrepreneurs, especially in agribusiness. Nigeria has the third largest population in the world after India and China, and because of that, we believe that as entrepreneurs and as a company, if you do not support and empower the people around you, you cannot say you have genuine success. For instance, you can’t say you are comfort­able, your family is comfort­able and you do not have any problems.
Because of that, we have taken it upon ourselves to employ as many people as we can, not only in Nigeria but also in places like Ghana, Cameroon, Ni­ger and we are reopening our offices in Togo and Benin and other sub-regions of the continent. Our business is across Africa and we ensure that we empower people and have more food on the table. As we assist African people, we also get better values in terms of funds and expand­ing the company.
I take about three weeks off in a year and my perfect vacation would be to visit an African country that is serene and close to nature. Africa is a land of opportu­nity, irrespective of the area we look at it, both economi­cally and socially. If we can develop our tourism, more people will come to Africa for leisure and business. Al­ready, you see more foreign­ers spending their vacation in Africa because of the natural and serene environment. As Africans, we should value our culture and the products made in our country.

The United National Party of Ranil Wickremasinghe  can only increase the Cost of Living: The Common Candidate should know this fact.

Posted on December 14th, 2014


By Garvin Karunaratne

The Common Candidate declaring that he could bring the Cost of Living down requires a last laugh because he does not know that it was the United National Party his main supporter that abolished and closed down the infrastructure that our country had to control the cost of living.  President Jayawardena abolished the main part and Premier  Ranil Wickremasinghe abolished what was left of the great infrastructure  that Sri lankan political leaders and administrators had carefully built up since independence. I was myself a party to build up that infrastructure in my service in the Administrative Service.
This infrastructure comprised:
            The Marketing Department for controlling the prices of local produce- vegetables, fruits, eggs etc..
            The Guaranteed Price Scheme for controlling paddy and rice milling. This was implemented by the Marketing Department and later by the Agrarian Services Department,
            The CWE(Cooperative  Wholesale Establishment) for controlling the prices of imported produce that was considered essential.
            Price Controls
            Weights and Measures Control.

 All these programmes were implemented on the basis that the Government had the right to intervene in all commercial activities in the interests of citizens. This infrastructure  was intact till 1977 when at the behest of the World Bank and the IMF(International Monetary Fund) this entire infrastructure was abolished or  under funded because the tenets of the Open Economy was for the Public Sector to give up all commercial activities. That was left to the Private Sector. 
In 1977 when President Jayawardena came into power he embraced the Open Economy as advised by the IMF which meant that the Private Sector was the engine of growth.

He dismantled the Marketing Department and the Guaranteed Price Scheme for paddy and other cereals including Rice Milling and the major part of the CWE was also abolished. What was left of the CWE was abolished during the Prime Ministership of Ranil Wickremasinghe in 2002 and 2003.

 Thus to expect the Cost of Living to be controlled or brought down by anyone who is working with the United National Party is a non runner. It cannot and will never happen.
Let us go into the working of this infrastructure because it appears that the leaders who are supporting the Common Candidate and the Common Candidate himself appear to be ignorant of the methods of controlling the cost of living. 

The writer worked as an Assistant Commissioner in the Marketing Department from 1955 and in the Agrarian Services Department from its inception in 1958 to 1967. Later he was in charge of these Departments and in charge of Price and Weights and Measures Control as the Government Agent of a District.

 The Marketing Department.

The Department for Development of Agricultural Marketing of the Fifties and Sixties under the able leadership of Commissioners Basset and later B.L.W.Fernando ensured that prices of all essential local produce was indirectly controlled and the traders were compelled to offer fair prices to the producers and the retail shop keepers were compelled to sell at fair prices to consumers.
As the Assistant Commissioner of a Province I visited all major producer fairs, purchased produce at some and dispatched the produce to the Tripoli Market in Colombo for sales overnight.” (Karunaratne: How the IMF Ruined Sri lanka…, Godages) During my years in the Marketing Department at least on three days in the week my day started at four in the morning  to visit producer fairs that opened at six. Then we did not have the infrastructure of roads built by our President Rajapaksa and we laboured on narrow roads for hours on end.

In detail,This Department had Assistant Commissioners in all the major districts where local produce was grown. It had a staff of Marketing Officers and Managers of Vegetable and Fruit Purchasing Centers and also had Sales Depots in the main conurbations. In Colombo there were over fifty retail outlets.

The method was to buy vegetables and fruits from producers, paying the producers a higher price than what was offered by the traders at the village fairs where producers brought their goods for sale. Very often at producer fairs the purchasing traders get into a ring and offer low prices. At the close of day the producers are compelled to sell to the traders at whatever price because otherwise they will have to incur transport costs and moreover the vegetable produce will waste away and become unsaleable.  The goods  purchased by the MD  was dispatched to Colombo and other cities overnight.

The entire scheme was controlled by the Tripoli Market in Colombo. There was a Marketing Officer at the Wholesale Market in Pettah, Colombo who reported the availability and the prices to the Assistant Commissioner in charge of the Tripoli Market.  The Marketing Officers and the Assistant Commissioners in the  Districts  reported the availability of produce and the prices at which the traders purchased the goods. The Assistant Commissioner at Tripoli Market  analysed the prices in Colombo and in the producer areas and fixed a purchase price which was higher than the rate at which traders bought from producers.  A very small margin of around 10 to 15% was kept for wastage and transport costs and a retail price was fixed for sales in the sales depots in Colombo and other cities.  This retail sale price  was lower than the sale rate at the wholesale market in Colombo. The aim was to make available vegetables and fruits at cheap rates to the dwellers in the cities.
The traders at both the producer areas as well as the traders at the wholesale markets in Colombo had to adjust their rates according to the rates fixed by us if they were to be in business. In other words the traders who purchased at the producer fairs had to adjust their prices upwards as otherwise no one will sell to them because the Marketing Department Depot was open and buying. In the cities the wholesaler had to sell at a lower rate because the MD retail units were selling at a low rate. While the margin we kept was in the region of ten to fifteen percent generally the trader at the purchasing unit kept a fifty percent mark up and the wholesaler in Colombo also kept a fifty percent mark up.

I was in charge of the Tripoli Market in 1956 and I not only fixed the prices to purchase produce in the producer areas  but was held responsible to ensure that all the City Stalls were full of stocks. I can yet remember the names of stalwart  officers- RFC Livera,  Kulasingham, Adhikari, who could be trusted and  who ran round in circles to ensure that all City Stalls had stocks.  

The MD actually purchased around ten percent of the crop but we were able to manipulate the prices that the Private Sector purchased and sold because we did not keep any margin as profit. The small margin we kept was to cover transport and wastage. We really did control prices. For instance  The Marketing Department  at Ambalantota purchased curd from Ridiyagama at around twelve in the morning. This was immediately dispatched to Matara by van. This was brought to Triploi Market  by overnight train  the next morning and offered for sale both at Triploi Market and at our depots.  We fixed a low margin to cover transport costs only.  This effectively controlled the prices of curd in the entire city.

  The entire system was based on service and making a profit was not a concern. In fact we Assistant Commissioners were found fault if we incurred a profit  or incurred a loss. We were expected to be able to avoid making a loss. 

The MD Scheme was successful in reducing the margin that traders kept as profit,  This enabled ensuring  low prices in the cities. The abolition of the MD Scheme enabled the traders to rule the roost and prices skyrocketed because of the high profit margins they kept.This is a scheme built up in Sri lanka which I have not found in any other country and I have traveled in almost all Asian Third World countries.

It is to the credit of the Sri lankan  Army that they did  purchase vegetables and sold at lorry sales in the City to bring the cost of living down a few years ago.  The Marketing Department had a bakery that made bread, rolls and sold at cheap rates and this effectively controlled bakeries. Today the Sri lankan Army had opened food outlets at Battaramulla etc where meals are available  at cheap rates. I have taken meals there and can vouch for the quality.  When I worked in the South I was in charge of the MD Canteen at Kataragama where we made and sold rice and curry, chappaty and thosai all at cheap rates to ensure that the hoteliers there could not sell at fanciful rates.

It is sad that the United National Party killed this effective method and it is hoped that someday this system will be restored. But that will never happen with the Common Candidate.


The MD Cannery


In 1954 the MD established a Canning Plant and commenced canning fruits. The fruits used were offered a floor price – a price at which we would buy everything that was offered. Traders generally bought an amount that their wholesaler needed and if the supplies were more they would  reduce their price.  The MD offered floor prices for totatoes, red pumpkin, ash pumpkin, organges and pineapples.

The tomatoes were made into tomatoe sauce and juice, the Red Pumpkin made into Golden Melon Jam, the Ash Pumpkin made into Silver Melon Jam,  Oranges made into Juice, Passion Fruit made into Juice, Pineapple made into Pieces, Rings and Juice.  With this the Chena cultivators made good money with the sale of their crop. On the other side Sri Lanka was able to become self sufficient in Jam, Tomatoes sauce, and Juice.  And save foreign exchange by avoiding imports.The MD was even able to build up exports of pineapple pieces and rings and  Assistant Commissioner Oswald Tilkekeratne  went abroad often for this purpose.

When President Jayawardena abolished the Marketing Department the Cannery was privatized. It is being run today by a private company but it does not offer prices for local produce. My estimate is that fifty percent of the crop is wasted for lack of buyers today. We are not self sufficient in fruit juice today purely because of the waste due to the lack of sales and the lack of a Cannery..



The CWE imported all essential items and sold them at their Retail sales Depots at low rates keeping a low margin. The CWE had a large number of retail sales depots.  This did not enable the Private Sector to import and keep high profit margins. The main items imported by the CWE were lentils, chillies,  coriander and other curry stuffs,The CWE was partly abolished during the days of President Jayawardena and the rest was abolished during the time when Ranil Wickremasinghe was Prime Minister.


The Guaranteed Price Scheme

In order to enable farmers to obtain a maximum price for their produce like paddy , kurrakan  etc the Government offered a premium price, The concentration was on paddy as Sri lanka was not self sufficient.Paddy was accepted from genuine producers   only through Cooperative Societies. The aim was to ensure that the high price went to the producer.The paddy was milled in Rice Mills that were run by the Department as well as through rice millers.

This rice was issued on the ration and any excess was sold to traders.This was an intervention into commercial activities and this Scheme was abolished and the Rice Mills were abandoned and sold for a song.Once I gazed in amazement at the ruins of the Ambalantota Rice Mill that was broken up and parts sold for a song and parts left to weather and die. That was my home for a full year when I controlled the Southern Province and then we milled rice on a 24 hour basis and employed over a hundred people. Now with the dismantling of rice mills we are slowly  importing rice mills.  

After this Scheme was abandoned paddy purchasing was commenced and then paddy was purchased not from genuine producers. Anyone that brought paddy to government stores were paid the premium price. In the GPS days paddy was purchased only from genuine producers on a list approved by the village level officers and then the premium price offered went directly  to the producers.  After the Scheme was abolished, when purchased were made, as we do now,  the premium price goes to the traders, mostly rice millers and not to the producers.

Price Control

The prices of all essential goods like Lentils, Sugar, Chillies, were controlled. These were imported goods and a reasonable margin was allowed for the traders. Price Control was  officially abolished. Though at a late stage some prices are controlled  the situation is far from the days when goods were available at cheap rates., The items like Sugar and Chillies were also sold at MD Sales Outlets. 


Weights and Measures

There was effective control over weights and measures. Inspectors were active.
We as administrators were heavy weights. The bakers in the cities knew that we were on the look out for any bakeries that sold short weight bread. If any bakery tried to,  then the wrath of the Government Agent was leashed out on them with  frequent raids by Price and Weight Control Inspectors.  If the Government Agent charged bakeries for short weight the bakers were certain of a maximum punishment at the hands of the Magistrate.

Under the open economy which has been followed since 1977 by the United National Party and which the Common Candidate has vouched to uphold the weight is for the Public Sector to be in the back ground and allow the private Sector to make a fanciful profit.  This entire infrastructure was abolished by the Jayawardena Government at the behest of the IMF and up to date there is no mechanism to control the cost of, living.

The very fact that the final blow to the CWE was done during the time of the Prime Ministership of Ranil Wickremasinghe should be realised by all parties supporting the Common Candidate.. 
Once this entire infrastructure was  dismantled, it is extremely difficult and very costly to establish it again. 

This infrastructure was abolished at the instance of the IMF and now because  under the open economy we have become an indebted nation, it is impossible to re establish this public sector activity because we will displease the IMF whose blessings we require to attract foreign investors and  obtain loans to keep ourselves afloat. The culprit for this is the United National Party of President Jayawardena  that made Sri Lanka follow the open-liberal economy and paved the way for Sri Lanka to become an indebted country and Prime Minister Ranil Wickremasinghe. 
Thus for the Common Candidate  to state that he will control the Cost of Living is  something that deserves a last laugh. His very statement that he will try to control the cost of living proves his ignorance.
Garvin Karunaratne,
Former Government Agent
13 th December 2014

13 Responses to “The United National Party of Ranil Wickremasinghe  can only increase the Cost of Living: The Common Candidate should know this fact.”

Thanks for that history of price control efforts in Sri Lanka and how they were undermined by the IMF, World Bank, and the UNP.The IMF has been an advocate around the world for ‘privatization’ as they believe this is the solution to all economic problems when the reality is that it only promotes the interest of the very wealthy. They therefore attach their privatization agenda to all of their loans, and it is commendable that Rajapaksa rejected IMF loans recently, in part because of the undesirable strings attached.
Certainly, there is room for genuine capitalist activity within an environment where the prices of essential goods and services are regulated, and these mixed-economies seem to do best in delivering the optimal results for the people living in these countries.Once you have the entire economy only working for the wealthy few at the top while most citizens struggle to make ends meet (the United States is a good example of this), then the general happiness of the public decreases.
There is a REASON Denmark scores highest on the worldwide happiness surveys, and it has more to do with harnessing capitalist tendencies for the benefit of all and making sure essential items such as jobs, education, healthcare and housing are always available to anyone who lives there and that costs of utilities (oil, electricity, water, etc.) and food are never a significant share of anyone’s income.It is totally embarrassing (or should be) to walk around the streets of San Francisco and have to literally step over multiple homeless people just to walk down the street. They say in America this is the free market at work, but is this really desirable and conducive to human happiness?
Dear Garvin Karunaratne, let me acknowledge that I have not carefully read all that you have said because there is so much that is being blogged about the Presidential Elections. Also it is axiomatic that one has to read slowly and know a good deal of Economics to properly evaluate what you have written. Ananda-USA has become “my teacher” on certain matters, and his parody of Tennyson was much easier to skim through.However, this much was certain the moment the last budget was presented. All those handouts (and I have also benefitted from them) that were announced have to lead to inflation, although a retired World Bank Finance Consultant whom I meet daily has told me that a devaluation of the rupee within a few months is not inevitable, but is likely.Almost everything that we write now tends to be propaganda; that includes what I say! Let us hope that Sri Lanka on the 9th of January is a better place for all its citizens as a result of all this discussion.

Procurement Relief for Sonepur

By Express News Service
Published: 15th December 2014 06:02 AM
Last Updated: 15th December 2014 06:02 AM
The process to continue for 90 days unlike 60 days earlier

SONEPUR:  Setting the farmers’ apprehension of loss due to delay in procurement of kharif paddy to rest, the district administration is all set to start the process from Monday.Collector RP Singh said concrete steps have been taken for smooth procurement of paddy and the problems regarding online data entries have been rectified.Speaking to mediapersons on Sunday, Singh said the district administration was fully geared up and the farmers would not face any problem.
Out of 32 rice millers, 13 have been found eligible for procurement as they have delivered their quota of custom milled rice. Steps have also been taken to rope in millers from  Sambalpur, Bargarh, Balangir and Nayagarh to participate in the process.Altogether 85 Primary Agriculture Co-operative Societies (PACS) will participate in the process to procure 1.08 lakh tonnes of paddy. The procurement will continue for 90 days unlike in the past when it was closed in 60 days, he added.The Collector said each farmer of irrigated area can sell 20 quintals per acre while those in non-irrigated areas can sell 12 quintals to the PACS. Till now, 4,500 quintals have been procured and it will be increased from Monday. Earlier, the district administration had announced that paddy procurement would begin from December 1 but postponed it to December 9.
When the process took off, only four PACS identified to procure paddy from farmers turned up at the mandis.Till date, many farmers await arrival of PACS to lift their stock which is lying in the open at Regulated Market Committees (RMCs) exposing it to moisture.According to reports, while paddy is being procured in small amounts at the market yards in Binka and Dunguripali blocks, the process is yet to begin in Birmaharajpur, Tarbha and Sonepur blocks.

The problem has aggravated with the State Government issuing guidelines to keep rice millers away from the procurement process for their failure in delivering custom milled rice.With harvest of 70 per cent of paddy crop over and farmers in a rush to repay loan to avoid interest, further delay in procurement would force them to resort to distress sale of their produce at less than the minimum support price of `1,360 per quintal.

Short-duration crop varieties can help fight agriculture stress: experts

Sunday, 14 December 2014 - 1:19pm IST | Agency: PTI
Farm scientists need to direct their research towards challenges like water scarcity, soil degradation and bio-diversity loss, say experts.Development of short-duration varieties which are resistant to both biotic and abiotic stress, without sacrificing on yield, will solve the problem, said J S Sandhu, Agricultural Commissioner, Union Ministry of Agriculture here on Saturday.He was speaking at the national seminar on 'Emerging challenges and opportunities in biotic and abiotic stresses in agriculture' at the Directorate of Rice Research (DRR). 

Technologies like micro-irrigation, nano-technology and geographic information systems will help address the biotic and abiotic stress in agriculture, Sandhu said. Climate change is making agriculture complex, he said.He recalled that 'Bengal Famine' due to brown spot disease in rice and more recently, destruction of cotton crop due to boll worm had resulted in destruction of farm economy. The decline in monsoon last year by 29 per cent resulted in short supply offoodgrains by 16 million tonnes which was colossal, he said.SK Patil, Vice-Chancellor of IGKV, Raipur, said stress in agriculture arises due to population growth, climate change and declining land holding size. 

He emphasised on the need to design and develop farmer-oriented natural resource management strategies to solve abiotic stress in agriculture, particularly in fragile ecosystems.A Padmaraju, Vice Chancellor of ANGRAU, Hyderabad, said abiotic stress is more prevalent in rainfed ecosystem, whereas biotic stress is more in irrigated ecosystem. If both the stresses are addressed, production of crops can be increased. In the US, there are only four million farmers whereas in states of Andhra Pradesh and Telangana there are 13 million farmers altogether.

This excessive number puts pressure on land and other natural resources, he said.DRR's Director V Ravindra Babu said the Directorate is working out strategies to overcome the problems related to both biotic and abiotic stresses pertaining to rice. The research is prioritised to address problems arising out of water scarcity, climate change, shrinking land and other natural resources, he added. 


Secret Service: This Derbyshire pub puts a new twist on regular pub fayre

By Derby Telegraph  |  Posted: December 14, 2014Extra effort was appreciated at the Hollybrook Tavern.
YOU go out to the pub with a few friends for some food. One of you has the lasagne, one a burger and another a curry. None of this has any element of surprise. Except that this is not true.The lasagne at The Hollybrook Tavern is made with pulled beef, not mince, and has a particular succulent quality.The burger, initially a "classic", equally tender, has had added cheese and a beautifully cooked fried egg, perfect for dipping your seasoned, thick-cut chips in.The curry is not a chicken tikka massala, it is a jalfrezi platter and comes with chickpea and butternut squash dhal, basmati rice, poppadoms, onion bhajis and naan bread.Nothing hugely out of the ordinary.
 I mention it simply because the extra effort was appreciated.But let's start at the beginning.The Hollybrook Tavern is on the southern entrance to Heatherton, the first pub you hit as you come into Derby up Rykneld Road.It stands out in its surroundings, built of what look like reclaimed bricks (I am not a construction expert) in order to do so and, on a pleasant weekday evening, couples and friends were sitting inside enjoying the unpretentious ambience. And so your spy arrived with four friends in tow.We had already taken a sneak peak online at the menu during the day so we had decided on our mains before we had arrived.I had taken a liking to the menu – enough dishes to give a fair choice but not too many – though we felt a little let down by the starter options.
 We fancied a few little nibbles, a sharing platter of different flavours and textures, nothing too substantial.The pub does have sharing platters but of chicken wings, of nachos, of breads, but not a mixture.In the end we shared a portion of tempura prawns and one of beer-battered mushrooms.As it turned out, we were brought enough for one each and they fitted our needs perfectly, served in a mini galvanised bucket. Hot, tasty, crunchy, juicy.My companions' mains I have described already but the dish that stood out from the menu for your spy and my fifth companion was the slow-cooked beef rib, served with more of those fat chips, a flat mushroom, onion rings and half a tomato.It was huge.
A great thick bone with a lump of meat that looked dry, cooked to within an inch but, when you cut into it, oh so soft and moist. Your spy will admit to adding a little mustard on the side – the one thing the dish was perhaps missing was a little pot of warm piquant barbecue sauce.So, positives all round for the main courses.My companions then each chose a different pudding and, while your spy pretended to abstain, it was simply an excuse to be able to try each of theirs. And, I must say, they all passed muster.The only mildly negative comment I will make is: serve food on plates! Four of the meals were but the burger was served on a rather worn and cracked board that had no lip, making my companion approach the egg-topped burger rather tentatively for fear the yolk would run all over the table. There, I've said it.I will leave the last word to the beer. Chosen by one of my companions, it was Truman's Eyrie, beautifully golden and easy on the palate, a perfect accompaniment.

30,000 sacks of rice from Vietnam confiscated
Posted at 12/13/2014 1:04 AM
MISAMIS ORIENTAL - Operatives of the Bureau of Customs (BOC) confiscated around 30,000 sacks of rice from Vietnam delivered to the Mindanao Container Terminal in Tagoloan, Misamis Oriental.Authorities opened the container vans, which contained sacks of premium rice, glutinous rice, and sugar.According to Ruby Alameda, district collector from the Port of Cagayan de Oro, the goods were in 100 container vans. They have so far opened 60 container vans.She added that the cargo is considered smuggled as the importers did not have the necessary import permit from the National Food Authority (NFA).

Two companies, EC Peninsula and New Dawn Enterprises, were named as consignees but according to BOC, both denied owning the cargo.The agency will auction the smuggled rice by January. -- report from Angelo Andrade, ABS-CBN News Northern Mindanao

Ogun Customs Command seizes 15 trucks of rice

From Moshood Adebayo
The Ogun State Command of Nigeria Customs Service (NCS) has seized 15 trucks of assorted bags of rice within one week.The Area Comptroller of Customs, Mamudu Haruna, who made the disclosure, also warned importers of rice into the country to desist from doing so through illegal routes.The assorted bags of rice were said to have been concealed in various cars and other vehicles.While detailing the activities of the command between December 2013 to November 2014, the comptroller said the command collected N6, 467,642.83 as against N5, 390,662,512.53 collected same period in 2013.
While assuring that the command was working diligently and progressively  towards achieving its mandate, Haruna expressed delight that the  anti-smuggling efforts of the command was also yielding fruitful result.In this regard, he disclosed that the command recorded 1,482 seizures between December 2013  and November 2014, with duty paid value of N1,568,533,843.00 as against  1,226 seizures with duty paid value of N1,142,018,383.00 in the same period last year.Describing the achievements recorded so far as unprecedented, Haruna  expressed gratitude to the Customs Comptroller-General, Dikko Abdullahi Inde on ECOWAS Protocol on Transit goods.  This he said had led to the quantum leap of imported vehicles on which import duties were collected, which hitherto were smuggled into the country without payment of import duties and taxes.
His words: “The unscrupulous importers are now reconditioned by the effective anti-smuggling campaign since I took over the affairs of the command in December 2013. And this has forced the smugglers to resort to lawful declaration of imports and subsequent duty payment instead of risking seizure of their goods.” Rice is not banned but it is banned when it comes into the country through unapproved routes.
 The border stations are unapproved routes for  rice but you can make other importations. It is a Federal Government  policy, it is not Customs’ policy. We are only here to enforce the law, but  these are the enemies of the law.“Buying rice is not prohibited, it is allowed but go through the port where you’ll have to pay your tax to government, it is important. You are not paying the duty to  Customs’ pocket but government.

USA Rice Outlook Conference held this week in Little Rock
Among those participating in the ribbon cutting ceremony that opened the conference were Arkansas rice farmer and USA Rice Federation Chairman Dow Brantley and Chairman of the Arkansas Rice Council
Steve Orlicek.

By USA Rice Federation 
Posted Dec. 13, 2014 @ 4:00 pm 

The 2014 USA Rice Outlook Conference opened this week, bringing together rice producers from all six major rice-growing states and others from the U.S. industry for an educational program and trade show. The annual conference is the largest rice convention held in the United States.Among those participating in the ribbon cutting ceremony that opened the conference were Arkansas rice farmer and USA Rice Federation Chairman Dow Brantley and Chairman of the Arkansas Rice Council Steve Orlicek."Arkansas is honored to host this year's conference," said Brantley. 

"The support we've gotten from sponsors and exhibitors is overwhelming and we're excited to provide a venue for them to share their expertise and innovations."The conference educational program kicked off Wednesday with a host state welcome from Governor-Elect Asa Hutchinson who lauded rice farmers for their sustainability efforts, emphasizing the impressive gains rice farmers have made over the past 20 years in conservation of resources such as land, water and energy.

"The governor-elect is clearly plugged in on rice issues and we look forward to working with his administration in the future," said USA Rice President and CEO Betsy Ward.Wednesday’s program included conference regulars and favorites Jim Wiesemeyer on politics and Nathan Childs on crop outlook, as well as a learning session on the Farm Bill and crop insurance options.

The afternoon program featured a panel discussion on conservation opportunities available to growers led by former Natural Resource Conservation Service Chief Dave White, an interactive session on the Texas A&M Farm Bill decision tool led by Dr. Joe Outlaw and presentations by state research officials on developments and the outlook for each state.The USA Rice Outlook Conference is an educational service of the USA Rice Federation

Pesticide applicator training scheduled for Tuesday at rice research center


The first training will be held at 1 p.m. Tuesday at the Rice Research and Extension Center.

By Submitted 
Posted Dec. 13, 2014 @ 10:00 am 

The Arkansas County Extension Service will hold three Pesticide Applicator Training meetings  this winter, with different dates, locations and times so producers may be able to attend the training of their choice.  The first training will be held at 1 p.m. Tuesday at the Rice Research and Extension Center. Additional training dates are:  
• 1 p.m. Jan. 28 at Phillips Community College, DeWitt; 
• 6:30 p.m. Feb. 10 at the Rice Research and Extension Center; and
• 1 p.m. Feb. 25 at Phillips Community College, DeWitt.    

The trainings will be for those needing re-certification as well as for those applying for a new license in order to purchase restricted use pesticides.  Producers who need re-certification should receive a letter from the State Plant Board informing them of the requirement for re-certification before a 2014 license can be issued. Because of funding reductions by the EPA for the pesticide applicator training program, the Cooperative Extension Service must charge private applicators for certification training. The fee is $10 per person, payable at the door the day of the training. This certification registration fee is in addition to the price producers pay the Arkansas State Plant Board for their license. Please remember that in most cases producers will need the training only once every 5 years. Make  checks payable to: UA, Cooperative Extension Service, Arkansas County.

County Crop Production Meeting
The annual Arkansas County Crop Production Meeting will be held on Thursday, Feb. 5, at the Rice Research and Extension Center, beginning at 8 a.m. The program will conclude with a catfish lunch at noon. Additional program details will be provided prior to the meeting.

 These meetings are open to all eligible persons without regard to race, color, national origin, religion, gender, age, disability, marital or veteran status or any other legally protected status. Persons with disabilities who require alternative means for communication of program information (large print, audiotapes, etc.) should notify the county Extension office as soon as possible prior to the activity. For additional information, call (870) 946-3231 or (870) 673-2346. 
C4 photosynthesis increases crop yields
Saturday 13 December 2014 12:36PM
As the world population increases, so does the need for more food. It is predicted food production will need to increase 50% by 2050. With little space available for additional farmland, there is pressure to increase crop yields.
Botanists are aware of a special type of photosynthesis, which operates at higher efficiency which has evolved across 18 families of plants covering 67 difference genera. Known as C4 photosynthesis, it is found in corn, sugar cane and millet. The challenge is to identify the genes controlling this photosynthesis, and implant it in crops such as rice, hopefully producing higher yields.
The work is a collaborative effort linking universities in Cambridge, Toronto, Alberta and the International Rice Research Institute in the Philippines.

Short-duration crop varieties can help fight agriculture stress: experts

Sunday, 14 December 2014 - 1:19pm IST | Agency: PTI
Farm scientists need to direct their research towards challenges like water scarcity, soil degradation and bio-diversity loss, say experts.Development of short-duration varieties which are resistant to both biotic and abiotic stress, without sacrificing on yield, will solve the problem, said J S Sandhu, Agricultural Commissioner, Union Ministry of Agriculture here on Saturday.

He was speaking at the national seminar on 'Emerging challenges and opportunities in biotic and abiotic stresses in agriculture' at the Directorate of Rice Research (DRR). Technologies like micro-irrigation, nano-technology and geographic information systems will help address the biotic and abiotic stress in agriculture, Sandhu said. Climate change is making agriculture complex, he said.

He recalled that 'Bengal Famine' due to brown spot disease in rice and more recently, destruction of cotton crop due to boll worm had resulted in destruction of farm economy. The decline in monsoon last year by 29 per cent resulted in short supply offoodgrains by 16 million tonnes which was colossal, he said.SK Patil, Vice-Chancellor of IGKV, Raipur, said stress in agriculture arises due to population growth, climate change and declining land holding size. He emphasised on the need to design and develop farmer-oriented natural resource management strategies to solve abiotic stress in agriculture, particularly in fragile ecosystems.

A Padmaraju, Vice Chancellor of ANGRAU, Hyderabad, said abiotic stress is more prevalent in rainfed ecosystem, whereas biotic stress is more in irrigated ecosystem. If both the stresses are addressed, production of crops can be increased. In the US, there are only four million farmers whereas in states of Andhra Pradesh and Telangana there are 13 million farmers altogether. This excessive number puts pressure on land and other natural resources, he said.DRR's Director V Ravindra Babu said the Directorate is working out strategies to overcome the problems related to both biotic and abiotic stresses pertaining to rice. The research is prioritised to address problems arising out of water scarcity, climate change, shrinking land and other natural resources, he added.

Rice Farmers In A Quandary
By Camelia Nathaniel
With the government deciding to reduce the price of rice, the farmers are skeptical of receiving the price for their paddy that was promised during the last budget.
 According to the National Organizer of the All Ceylon Farmers’ Federation (JVP) Namal Karunaratne, the farmers welcome the decision taken by the government but he said that he hoped the government would not use that as an excuse to reduce the price of paddy that was promised to the farmers.
“At present, the farmers have no stocks of paddy and the new price reduction will apply to them only after the next season is cultivated. The government does not even purchase 5% of the total paddy production of the local farmers, and the bulk of the paddy production of the local farmers is purchased by the private sector. Even the 5% that the government buys, they put such stringent rules such as insisting on the moisture level of the paddy at less than 14% and reject a sizable portion of the paddy. The farmers most often cannot dry the paddy to bring down the moisture levels to less than the stipulated figure as the paddy drying is a totally different field which the farmers have no capacity to carry out.

“In order to dry the paddy to contain less than 14% moisture, you need specialized machines which our local farmers have no access to. However what happens then is that the farmers are left helpless and the middlemen traders make use of their plight and purchase their paddy for ridiculously low prices and later sell the same paddy to the government stores using the farmer’s names.This is a racket that has been in practice for a long time where the government representatives work in collaboration with the traders and play out the poor farmers.Right along it was the poor farmers who were cheated and due to this scam they were forced to sell their paddy to the traders for a song, sometimes even unable to cover their costs,” he charged.

However he also said that if the government continued this stance even after the elections are concluded, then the traders are certain to use this to reduce the price of paddy and play out the farmers. Although the government in their last budget promised a stable price for paddy, the farmers charge that this is something that is floating in the air as the stipulated price has not been legally brought into effect.“Hence if such a situation arises it will be a great blow for the farmers and they will certainly not be able to sustain their farming activities. Even now the farmers are struggling and further reducing the price of paddy will only destroy them to a point that many of them will be forced to give up farming. Therefore we are keeping a close eye on the situation and monitoring the actions of the government. What we say however is that in order to overcome the issues faced by the farmers and encourage them to produce paddy, measures have to be taken to reduce the cost of paddy production.”

There’s no need to legalize the paddy price. We have taken measures to purchase all the paddy produced by the farmers. This government is the one that established 400,000 paddy storage facilities in order to store paddy purchased
Johnston Fernando
Minister of Consumer Affairs
According to the government statistics, issued midyear by the Central Bank, the cost of production of a kilo of paddy is Rs. 33.22. Therefore, having spent this sum to produce a kilo of paddy if the farmer is forced to sell his produce for less than that, then he certainly faces a big problem as he is unable to even cover his costs.

However, in spite of the repeated complaints that this was the plight of the poor farmer, nothing has been done to protect the farmer. Therefore the concern of many farmers is that with the government deciding to bring down the price of rice, they will be the ones who are made to pay and will eventually suffer. With the stipulated price of a kilo of paddy at present at Rs. 40, if the farmer is facing this predicament, one can only imagine what the poor farmers will have to face when the prices are further reduced.

One of the main complaints that the farmers have is that the cost of farming equipment has been steadily increasing and the government has done nothing to regulate the prices of these farming equipment and also the fertilizer and the pesticides. Although the government on many occasions have stated that the fertilizer will be issued at concessionary rates to the farmers, many of these farmers claim that they do not receive such stocks. Karunaratne said that it was a welcome move for the government to reduce the price of rice as it is a staple diet of the country especially the people of the lower income group. However he said that in relation to the reduction in rice prices, if the paddy prices drop too, then the farmers will be in serious trouble.Therefore he said that the only way the farmer could be saved would be to regulate the stipulated price.

 If this is implemented, then no one can manipulate the paddy prices and the farmers would not be forced into selling their paddy at ridiculously low prices to the traders. Further the government could have taken this measure when it was proposed in the budget by gazetting it and having it passed by the parliament which would then be legalized. But unfortunately the government too has been playing games with the farmers.

Importing of rice

Another issue that has been affecting the local farmer is the fact that while the local paddy production is being allowed to be manipulated by the middlemen, the government is allegedly allowing the import of rice by creating a false shortage. Karunaratne alleged that while the government is rejecting the paddy of the farmers by claiming that it contains more moisture content, they create a falsified shortage of rice and this permits the rice importers to gain permission to import rice.

The imported rice is sold at a lower cost which is putting further pressure on the local farmers.“The problem is that the cost of production of locally produced rice is higher than the rice that is imported. Hence if the government does not take measures to reduce the cost of production and instead opt to import rice, then this will only force the local farmers to give up farming and focus on some other mode of income.However the fact is that these farmers have no other means of earning and providing for their families, hence when the farmers are forced into a difficult situation where they are unable to sustain their trade, then this is when they commit suicide.
”‘Therefore the government cannot shirk their responsibility and pretend that by merely coming up with numerous proposals alone they could hoodwink the people and the farmers and get away from their responsibility. In places like India and China, the farmers are looked after well by the government.The farmers only have to cultivate and the government takes care of all their other issues and provides them all the required incentives and requirements. They receive a proper price for their produce and also assures them a stable market for their stocks. However in Sri Lanka it is just the opposite and the government only promises the farmers the sun and the moon on paper but in reality the farmers are let down badly to a point that we have one of the highest rates of suicide in the farming sector,” charged Karunaratne.

Last year we produced 64,000 metric tons of onions locally but we imported 173,000 metric tons. This indicates that we are only producing a fraction of the local requirement. But the irony is that even when producing just that mere fraction of the actual local requirement, these poor farmers are unable to sell their produce at a reasonable rate. This being the case, what if the farmers produced the entire requirement of the country? Will they be able to sell their produce?
“This is why the government needs to take note of the real issues faced by the farmers and create an environment that encourages the farmers to produce more and take the country to a point where we export the excess produce so that the farmers too could boost their income. This would also boost the country’s economy and bring in much needed revenue. However what is happening is that those in power have also got themselves involved in the farming sector and a handful of them are manipulating the entire process where they make millions while the farmers are left in the lurch
Namal Karunaratne
National Organizer of the All Ceylon
Farmers’ Federation (JVP)

Even in the recent issue faced by the onion farmers, they were facing a grave situation where they could not sell their produce for prices that would even merely cover their costs. Eventually when their pleas fell on deaf ears of the government, the farmers flocked together and staged a huge protest that finally forced the government to address their grievances.“Last year we produced 64,000 metric tons of onions locally but we imported 173,000 metric tons. This indicates that we are only producing a fraction of the local requirement. But the irony is that even producing just that mere fraction of the actual local requirement, these poor farmers are unable to sell their produce at a reasonable rate. This being the case what if the farmers produced the entire requirement of the country? Will they be able to sell their produce?

‘This is why the government needs to take note of the real issues faced by the farmers and create an environment that encourages the farmers to produce more and take the country to a point where we export the excess produce so that the farmers too could boost their income.This would also boost the country’s economy and bring in much needed revenue. However, what is happening is that those in power have also got themselves involved in the farming sector and a handful of them are manipulating the entire process where they make millions while the farmers are left in the lurch,” he charged.

According to Karunaratne the government does not care for the farmer and they simply leave the farmers to carry out their farming on their own. This has also discouraged the younger generation and they deviate from cultivation and turn to more stable sources of income. “In fact in the 2012 budget speech page 10 the President said that he would make the country self sufficient in rice production and set up four rice processing zones.

North, South, East and the North Central were the rice processing zones and according to the President, Rs. 200 million would be allocated for the purpose. He said that once the country would be made self sufficient in rice production, by 2014 the country would be in a position to export 200,000 metric tons of rice.

This government that promised so much has done nothing so far and none of these promised zones were ever set up. The government that said that they would export rice by 2014, had imported 100,000 metric tons of rice and they have also obtained approval to import another 50,000 metric tons and have also given the green light for private importers to import rice. This has to stop and the government needs to take more responsible measures in order to safeguard the farmers and honour their pledge to the farming community of this country and the people,” added Karunaratne.

Rice imports by traders soar

Sohel Parvez
Rice imports in just five months this year crossed last year's total as businessmen found foreign produce, mainly from India, cheaper than local output.Bangladesh's private importers brought in 4.05 lakh tonnes of rice from July to December 9, which is 8 percent higher than in the same period last fiscal year, according to food ministry data.Surging rice imports supported by the absence of duty and the aman harvest, the year's second largest rice crop, have lowered prices in the domestic market, affecting both farmers and local millers.
“Many millers are avoiding milling due to stiff competition from imports,” said Md Abdur Rashid, president of Bangladesh Auto, Major and Husking Mills Association.During the aman harvest season, farmers usually sell a part of their produce while millers increase processing.But the large-scale arrival of low quality and cheaper rice put local millers and farmers in a tight corner, Rashid said.Prices of parboiled rice (5-percent broken) were $385 a tonne in India, compared to $422 in wholesale prices for coarse rice in Dhaka.Imports are likely to fall in January due to the weakening of the taka against the dollar, as witnessed by a smaller number of new LCs, said Sarwar Alam Kazol, a rice importer.Retail prices of all types of rice fell in Dhaka over the last month, according to the Trading Corporation of Bangladesh.
"Farmers will be discouraged from growing rice if the import continues," said Rashid, also managing director of Rashid Agro and Food Products, a leading rice miller."We have long urged the government to impose duty on rice imports. Rice imports should be discouraged for the sake of farmers and local millers.”The soaring imports came after Bangladesh harvested a record crop last fiscal year, and the government is set to export 50,000 tonnes of rice to Sri Lanka.
Production rose to 3.44 crore tonnes in fiscal 2013-14, from 3.38 crore tonnes a year ago, according to Bangladesh Bureau of Statistics."It's a contradiction. On the one hand, huge quantity of rice is imported. On the other, government is going to export," said Nirod Boron Saha, president of rice and paddy stockists' and wholesalers' association in Naogaon."There are no buyers (retailers from cities). It seems that all of them are purchasing imported rice from border areas," he said. “They are not getting fair prices for their produce, and it will affect boro acreage in the next season," Saha said.“Farmers are the ultimate losers.”
Published: 12:00 am Sunday, December 14, 2014

Rice millers lift paddy at `600 per quintal

Posted in State by Ashutosh Samal On December 13, 2014. No comments
Post News Network
Malkangiri, Dec 13: Farmers are forced to sell paddy to rice millers and their agents at dirt cheap price as procurement centres have not been started in the district yet.

Farmers criticised the administration for the inordinate delay in opening of procurement centres even as paddy was harvested in the district several weeks ago. They added that procurement centres had been opened in other districts.Farmers have to sell their paddy at a price between `600 and `900, while the minimum support price (MSP) of fair and average quality (FAQ) of paddy is `1,360 and that of grade-1 FAQ paddy is `1,400.

According to residents, they have piled up paddy sacks at their backyards and spent nights watching the grains as the procurement centres are yet to open.As they are deprived of space to store the huge volume of paddy, they sell it to private buyers at very low prices. That apart, an immediate need of money to repay the loans they had taken from local money lenders and for their daily expenses pressed them to resort to distress sale of paddy, the farmers rued.
Meanwhile, farmer leaders raised voices against the government’s decision of procuring 12 quintals and 16 quintals of paddy from an acre of irrigated and non-irrigated land respectively.According to official sources, paddy procurement will start in the district December 15 through 26 mandis in several blocks.
Large-sized Agricultural Multi-purpose Societies (LAMPS) have been entrusted with the procurement from farmers.Meanwhile, officials raised concern as to whom the paddy should be transferred after procurement.
They said millers are yet to sign agreements with the administration to take paddy for milling.According to official sources, in the first phase, 4.47 lakh quintals of paddy would be procured in the district. Seven mandies would be opened in Korukonda block, five in Kalimela, four in Mathili, three in Malkangiri and Khairapur blocks each and two in Padia and Kudumulugumma blocks each.

Millers selling PDS rice, state in slumber

DC | L. Venkat Ram Reddy | December 14, 2014, 01.12 am IST
Since, most of the rice millers enjoy political clout, the government too is not initiating any action against them.
Hyderabad: Rice millers in Telangana state are minting money out of rice stocks meant for public distribution system.Though the millers are supposed to hand over custom-milled rice (CMR) stocks to the government within 15 days, they failed to do so even after the deadline was extended by more than a year.Instead, they are earning crores by supplying those  rice stocks to districts within the state and neighbouring states.

Since, most of the rice millers enjoy  political clout, the government too is not initiating any action against them.The government gets the rice for PDS by two ways, namely custom-milled rice and levy rice.In CMR, the government purchases husked rice from farmers and then allocates it to mills for processing for a fixed charge and rebuys again from them.
In the levy rice policy, millers are allowed to sell a certain percentage of rice (25 to 70 per cent) procured by them in the open market, while the remaining (called levy rice) is collected by government agencies at a minimum support price (MSP).Millers in Nalgonda, Karimnagar, Nizamabad, Warangal and Adilabad have not handed over rice stocks to government for the last one years.“Around 75,000 metric tonnes of rice stocks are yet to be received by the government. If they fail the deadline of December 31, we will raid the mills and book cases against them,” said C. Parthasarathy, the commissioner for civil supplies.
He added that rice millers cite power shortage as the reason for not completing milling of rice.“This could be one of the reasons, but at the same time cannot be an excuse for delaying rice supplies. There are complaints that the millers are sending those stocks to open market,” Mr Parthasarathy added.However, T. Devender Reddy, president of Telangana Rice Millers Association refuted the complaint.  “None of the rice mills could run to their full capacity due to severe power shortage for the last one year.  We have to also meet milling of levy rice quota,” Mr Reddy explained.

Online Procurement Goes for a Toss

By Express News Service
Published: 13th December 2014 04:24 AM
Last Updated: 13th December 2014 05:59 AM

BARGARH:  Errors in data entry for online monitoring of kharif paddy procurement have landed farmers of the district in a lurch. Since necessary corrections in the data have not been made, more than one lakh quintals of paddy are lying in the open in different market yards.According to sources, out of 12,64,087 quintals of paddy brought to the market yards under Regulated Market Committees (RMCs) at Bargarh, Attabira and Padampur, 11,30,450 quintals have been procured by Primary Agricultural Co-operative Societies (PACS) till date. The rest 1,33,637 quintals are lying under open sky.

While market yards under Bargarh RMC have received 2,62,774 quintals of paddy, 2,58,378 quintals have been procured. Similarly, out of 6,73,980 quintals brought to Attabira RMC, 6,26,735 quintals have been procured. The worst hit is Padampur RMC where 3,27,333 quintals of paddy have been received and only 2,45,337 quintals procured.Apprehending that the paddy kept in the open may germinate in the dew and deny them a purchaser, the farmers have resorted to distress sale. They are selling paddy at `900 to `1,000 per quintal directly to rice millers against the minimum support price of `1,360 to repay loans.A farmer of Khairpali village B Appa Rao Choudhury said it has been several days since he left home to sell his produce at Godbhaga market yard under Attabira RMC.

 Since his name does not figure in the list of registered farmers, the PACs are denying to procure paddy.Another farmer, Ekadasia Sahu faces similar fate. He is stuck at Barahguda market yard under Bargarh RMC with no takers for his 200 quintals of paddy.Admitting that there are irregularities in data entry, Assistant Registrar of Co-operative Societies Lingraj Naik said steps have been taken to edit data and include the names of farmers besides their land holdings.

Civil Supplies Officer Ramakanta Ransingh confirmed that about one lakh quintals of paddy are lying in the market yards and efforts are underway for procurement of the stock.Meanwhile, BJP MLA of Padampur Pradip Purohit alleged that due to the conspiracy hatched by rice millers of Padampur and Bargarh, the paddy stocks are not procured. “About 10,000 quintals of paddy are lying in open in the market yards of Jharbandh, Dhaba, Loididhara, Padampur, Jamla, Bartunda, Dahigaon and Kansingha,” he said.Names of more than 20,000 farmers are missing from the registered list and they are clueless about where to sell their produce, he added.

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