Sri Lanka plans new paddy loan scheme with Rs. 120 minimum purchase price

Sri Lanka President Anura Kumara Dissanayake held talks with small and medium-scale paddy mill owners today (August 11) on a new mechanism to help them purchase paddy from farmers at a minimum price of Rs. 120 per kilogramme.

The meeting was held at the Presidential Secretariat in Colombo this morning to discuss obtaining the contribution of small and medium-scale businesses to maintain a stable paddy price and ensure farmers receive a fair price for their produce.

During the meeting, the mill owners briefed the President on difficulties they face in carrying out their operations, including problems in purchasing paddy and dealing with banks under the Odapana loan scheme.

They proposed establishing a mechanism to provide funds for paddy purchases through District Secretaries or Divisional Secretaries.

The mill owners said they have sufficient capacity to purchase paddy and that such a system could help maintain a stable price for farmers while also ensuring a fair price for consumers.

Minister of Trade, Commerce, Food Security and Cooperative Development Wasantha Samarasinghe said discussions would be held with District Secretaries on introducing a mechanism to provide loans to small and medium-scale businesses through District Secretaries for paddy purchases.

He said paddy should be purchased from farmers at a minimum price of Rs. 120 per kilogramme, while the maximum quantity purchased from an individual farmer should be 4,000 kilogrammes per hectare.

The Minister also stressed that accurate records should be maintained on the quantities of paddy purchased and the farmers from whom the purchases are made, adding that the records would be regularly inspected.

The proposed loan scheme is expected to be available to currently registered small and medium-scale mill owners.

The funds provided under the scheme must be repaid to the Government after the rice is sold. The Government also expects to provide similar concessions during future seasons to mill owners who successfully complete the programme.

It was further stated that the cooperation of all small and medium-scale businesses would be required to ensure the success of the programme and that it should be treated as a responsible undertaking aimed at safeguarding the country’s food security.

Officials of the Ministry of Finance also explained issues that had arisen due to the failure to repay loans provided under similar programmes in the past.

Under a previous system, the Government provided loans for the purchase of paddy and later purchased the paddy itself.

The mill owners welcomed the introduction of a loan scheme for paddy purchases on the instructions of the President.

They expressed confidence that, if the new mechanism continues, many small and medium-scale paddy mill owners who have withdrawn from the industry could return to the sector, while farmers would have a better opportunity to receive a fair price for their paddy.

Minister of Agriculture, Livestock, Lands and Irrigation K.D. Lal Kantha; Minister of Trade, Commerce, Food Security and Cooperative Development Wasantha Samarasinghe; Secretary to the Ministry of Finance, Planning and Economic Development Dr Harshana Suriyapperuma; Paddy Marketing Board Chairman Manjula Pinnalanda; officials of the Ministry of Finance; and small and medium-scale paddy mill owners attended the meeting.

The mill owners represented districts including Anuradhapura, Polonnaruwa, Badulla, Kandy, Ratnapura, Puttalam, Hambantota, Trincomalee, Batticaloa and Ampara.