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Leading rice miller stops paddy purchasing citing losses, PMB still out of picture

By Sanath Nanayakkare
Leading rice miller, Lankeshwara Mithrapala says he has suspended purchasing paddy because it is not proper to purchase paddy from farmers at prices lower than Rs. 120 per kilo, and if he did purchase at that price, he would have to absorb a loss of Rs. 23 from each kilo of rice.
This is happening at a time the government has declared a certified price for paddy at Rs. 120 and the state-run Paddy Marketing Board (PMB) is keeping itself completely out of its main task of purchasing paddy from farmers to ensure a competitive and fair price to them.
When asked if there was some connivance between government officials and private millers to enable the purchasing of paddy at the lowest prices imaginable, Mithrapala said,” We don’t want anyone’s help to run our rice mills. But we can’t buy paddy at Rs. 120 per kilo and let the end-consumer buy a kilo of rice at Rs. 220-230 because of the loss we have to absorb in the process. There are various other brands, Nipuna, Araliya, Lak Sahal etc. If they could buy paddy at Rs. 120, they would because this is a competitive business. But they can’t buy at that price either because that would cause a substantial loss,” he said.
“If the government starts purchasing paddy, the farmers will be relieved,” he said.
Responding to queries, he said: “I bought paddy at Rs. 118-119 about 3-4 days ago. We can’t ask for paddy from farmers at prices lower than that. So, I decided to stop purchasing paddy and produce rice from existing stocks and release them to the market. It is better to stop buying paddy if Rs. 120 can’t be paid for a kilo of paddy. So, the government must intervene,” he said.
When asked if his business was running at a loss, he said,” I have enough money to operate my businesses. But I don’t have funds to collect and keep paddy stocks. What I am saying is that I will purchase paddy at Rs. 120 and will give rice at Rs. 220 per kilo. But to do that the government must declare a six-month moratorium on bank loans. If we have money to buy paddy stocks we would do so without seeking bank facilities because working with our own capital would bring us higher returns. But what do we do if we don’t have money?”
Elaborating on his costing issue he said: “When you buy paddy at Rs. 120 a kilo, there are other costs to take into calculation to run the business sustainably. It takes 1.6 kilos of paddy to produce a kilo of rice. This means the paddy cost itself would be Rs. 192. So when you buy at Rs.120, it actually costs Rs. 192 for paddy alone. For each kilo of rice; Rs. 7 for packaging, Rs. 7 for transport, Rs. 3.50 for electricity, Rs. 8.50 for employee salaries and food, Rs. 10-12 for bank interest.
Then there are the EPF and ETF payments and wear and tear costs of machinery. All these need to be calculated and recovered. These costs amount to about Rs 46 per kilo of rice. Effectively, therefore, the total cost of a kilo of rice is Rs. 238. But we sell to retailers at Rs. 215 and they sell at Rs. 220.
“So, this means that we are releasing our stocks to the market at a loss. That’s why we are saying that we can’t buy paddy at Rs. 120,” he said.
Meanwhile, a group of farmers in Polonnaruwa said: “We are compelled to sell our paddy to private sector traders because the government is just sitting around leaving the big rice millers to buy paddy. When the government does not come forward to break the monopoly of the private traders, we have no option but to sell our harvest to them at lower prices. When we sell them paddy at Rs. 100 a kilo, the income from one acre of paddy is only about Rs. 200,000 ,which is not enough to cover our inputs and labour cost. Big rice millers are making the most of this situation.”
The warehouses of PMB still remain closed and farmers have not been informed whether it would enter the market to purchase their paddy.A source familiar with state sector banking told The Island that PMB had outstanding loans of over Rs. 2 billion payable to the state banks.
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Government to initiate new projects to help rural communities to strengthen the national economy – Prime Minister

Prime Minister Dr. Harini Amarasuriya stated that the government is currently working to initiate new projects across every area of Sri Lanka and to bring the necessary investments to rural areas in order to improve the participation of the communities in strengthening the national economy.
The Prime Minister made these remarks while addressing a public gathering held on Saturday (12th) in Nanattan, Mannar.
Prime Minister further stated:
“Our country has reached a decisive point. The government of the National People’s Power (NPP) understands the expectations of the people. The general public came together despite the ethnic and religious barriers to exercise their voting right against corruption in politics that existed in this country. Consequently, Anura Kumara Dissanayake was able to become the President in 2024. A month later, we formed a Parliament that will initiate in changing the history. Today, we have a government made up of 159 members. There is now a strong group in Parliament standing against corruption and a government that represents all ethnicities, religions, and regions. For the first time in history, we have formed a government made by a single party that represents everyone. The people are the ones who made this victory possible and they are the true victors in this cause.
We are committed to protecting the trust the people have placed in us and to fulfill their expectations.
You are well aware of how weak the economy was when we came to power. Officially, we had been declared a bankrupt nation before the world. For many years, Sri Lanka had no economic growth and was in a debt-ridden economy. The tourism sector had collapsed. Due to the corruption in political authority, investors were unwilling to invest the country. Today, we have changed all that. We have managed to steer the economy towards growth leading to investments being restored while the confidence in Sri Lanka is increasing internationally.
We are working to start new projects in every area of Sri Lanka to bring the necessary investments to the rural sector, with the aim of improving the participation of rural communities in the national economy.
The first budget of the NPP government has passed. Even though the economy is not yet strong, we focused on two main priorities in the budget: one was to develop infrastructure necessary for economic growth, and the other was to provide relief to people burdened by economic hardships. That’s why we have increased and extended the period of Aswesuma benefits. Further, vouchers to buy schoolbooks was distributed at schools with less than 300 students.
Previous governments were a burden to the people. But today, we have a very small Cabinet of Ministers. The government is no longer a burden to the people. We have reduced expenses, minimized losses, and eliminated corruption.
Because the government is not a burden to the people, it was able to provide relief to the people. Through this budget, the basic salaries of the public service has been increased. They have been given the opportunity to work freely. Decisions are now made on statistical data and not based on political preferences. What we expect is an independent public service. We are in need of a people-centered government as well as a public service which should be an efficient, corruption-free and people-sensitive. We have already created the necessary environment for that.
In order to develop the rural economy, the government has allocated a large amount of funding through this year’s budget. But, to ensure that these allocations are used properly to serve the people, the local government institutions need to be cleaned up. If the leaders who represents the villages are corrupt, the funds allocated will become worthless. That is why the upcoming local government elections has become extremely significant and decisive.”
The event was attended by the Members of Parliament Jegadeeswaran and S .Thilakanadan, public representatives, and candidates of local government election representing the NPP.
[Prime Minister’s Media Division]
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He said that the violence had disrupted vital services and created a state of lawlessness, severely affecting the public.
The MP accused political opponents of exploiting the Batalanda issue for electoral advantage, noting that for 36 years, no proposals were made to investigate the assassination of JVP leader Rohana Wijeweera.
He criticized the JVP for forming “probationary” governments with Chandrika Kumaratunga and backing Ranil Wickremesinghe in the yahapalana effort, yet failing to address the Batalanda issue during their tenures.
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