The President announces the regulations – The Island

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By Sanath Nanayakkare

The main rice miller, Lankeshwara Mithrapala says he has suspended the purchase of paddy because it is not appropriate to buy paddy from farmers at prices below Rs. 120 per kilo, and if he bought at this price, he would have to absorb a loss of Rs. 23 from each kilo of rice.

This comes at a time when the government has declared a certified price for paddy at Rs. 120 and the State Paddy Marketing Board (PMB) is standing completely out of its main task of procuring paddy. farmers to guarantee them a competitive and fair price.

When asked if there was some connivance between government officials and private millers to enable the purchase of paddy at the lowest prices imaginable, Mithrapala replied, “We don’t want anyone’s help. to operate our rice mills. But we cannot 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 it is a competitive business. But they also cannot buy at that price, because it would result in a substantial loss,” he said.

“If the government starts buying paddy, farmers will be relieved,” he said.

Responding to questions, he said, “I bought paddy at Rs. 118-119 about 3-4 days ago. We cannot ask farmers for paddy at prices lower than that. So I decided to stop buying paddy and produce rice from the existing stocks and put them on the market. It is better to stop buying paddy if Rs. 120 cannot be paid for one kilo of paddy. So the government must intervene,” he said.

When asked if his business was operating at a loss, he replied, “I have enough money to run my businesses. But I have no fund to collect and keep paddy stocks. What I am saying is that I will buy paddy at Rs. 120 and give rice at Rs. 220 per kilo. But to do this, 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 banking facilities because working with our own capital would bring us higher returns. But what do we do if we have no money?

Elaborating on his cost issue, he said, “When you buy paddy at Rs. 120 per kilo, there are other costs to consider in order to run the business sustainably. It takes 1.6 kg of paddy to produce one kg of rice. This means that the cost of the paddy itself would be Rs. 192. So when you buy at Rs.120, it actually costs Rs. 192 for the 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 wages and food, Rs. 10-12 for bank interest.

Then there are EPF and ETF payouts and machine wear and tear costs. All this must be calculated and retrieved. 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 that means we are releasing our stocks to the market at a loss. That’s why we say we cannot buy paddy at Rs. 120,” he said.

Meanwhile, a group of farmers from Polonnaruwa said, “We are forced to sell our paddy to private sector traders because the government just lets the big rice farmers buy paddy. When the government does not come forward to break the monopoly of private traders, we have no choice but to sell our harvest to them at lower prices. When we sell paddy to them at Rs. 100 per kilo, the income from an acre of paddy is only about Rs. 200,000, which is not enough to cover our inputs and labor costs. work. Large rice millers make the most of this situation.

PMB’s warehouses still remain closed and farmers have not been informed if he will enter the market to buy their paddy. A source close to the state banking sector said The Island that PMB had outstanding loans of more rupees. 2 billion payable to state banks.

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