Roaring millers and whining lions

Friday 19th March, 2021

The government is struggling to rein in the runaway prices of essential commodities, especially rice. It may be compelled to consider importing rice, according to Minister of Trade Bandula Gunawardena. About 100,000 MT of rice will have to be imported if push comes to shove, he has said. Minister Vasudeva Nanayakkara has said the government is left with no alternative but to import rice. Minister of Agriculture Mahindananda Aluthgamage tells us the government is planning to maintain a buffer stock of paddy weighing at least 300,000 MT. He is being overoptimistic. Some unscrupulous millers have already hoarded enough paddy and are in a position to manipulate the rice market.

Head of the Presidential Task Force on Economic Revival and Poverty Eradication, Basil Rajapaksa, has said at a recent meeting chaired by Prime Minister Mahinda Rajapaksa, at Temple Trees, the country has enough stocks of paddy. A stickler for statistics, he has got it right. Therefore, why should the government toy with the idea of importing rice? The problem boils down to hoarding, and the government ought to grasp the nettle instead of running around like a headless chicken. The solution is to conduct raids on the warehouses where paddy is hoarded. Rice imports will not help solve the problem. Such action will only enable some politicians and state officials, who must be salivating at the prospect of importing rice, to line their pockets.

No government has been able to tame the millers’ Mafia by importing rice, as we have argued in a previous comment. Sri Lankans prefer locally produced rice varieties, which suit their palates, to imported ones. If the government imports rice, the millers will release some of their stocks of rice to the market, causing the imported rice to remain unsold in the Sathosa warehouses and eventually disposed of as animal feed at extremely low prices. This, we have witnessed all these years.

The millers’ Mafia has been able to exploit both the consumer and the producer alike because governments lack the courage to take it on, with might and main. The SLPP grandees take pride in having liberated the country from the clutches of terrorists, but there are some areas where the writ of the state still does not run; they are the sprawling warehouse complexes belonging to powerful rice millers. Nobody dares enter these facilities as their owners have links to the government.

The government claims that it has appointed former military officers to key positions in the public service to straighten up some vital state institutions to serve the interests of the ordinary people. But in most cases, these ex-military officers are as helpless as their civilian counterparts. In May 2020, the Consumer Affairs Authority (CAA) visited several warehouses belonging to some big-time rice millers in Polonnaruwa. The team that took part in the inspection tour was led by CAA Chairman Major General (retd.) Shantha Dissanayake himself. But the officials ran into a brick wall when former President Maithripala Sirisena’s brother, Dudley, who is one of the millers accused of hoarding paddy, told them in no uncertain terms that he would not sell rice at the prices stipulated by the government. Subsequently, the millers had a meeting with the government, which agreed to an upward revision of the maximum retail prices of rice! The millers had the last laugh, and they always do. Thus, not even former battle-hardened military officers are equal to the task of taming the millers’ Mafia.

The incumbent government is not short of roaring lions within its ranks, but they have their tails between their legs when confronted by the powerful rice millers, who generously bankroll election campaigns of influential politicians.

Dudley Sirisena and State Minister Siripala Gamlath are among the millers who control the rice market. Getting the duo to release some of their paddy stocks will be half the battle in overcoming the artificial shortage of rice. If the government can pluck up the courage to do so, instead of barking up the wrong tree, it will be able to bring down the rice prices immediately, and prevent foreign exchange being spent on rice imports.