• Calls for independent regulatory body to oversee paddy purchasing, rice pricing, storage disclosures 

For decades, Sri Lankan farmers and small- to medium-scale rice mill owners have accused successive governments of ignoring what they describe as a long-standing monopoly within the country’s rice industry. 

Despite repeated promises during election campaigns and official statements pledging reforms, those involved in paddy cultivation and rice milling say a small, powerful group of large-scale millers continues to dominate both farmgate purchasing and market distribution, often at the expense of rural producers.

Tensions have flared again in recent months following the Government’s decision to import 40,000 MT of rice substitutes to address what officials described as a shortage of keeri samba in the local market. 

The move has drawn sharp criticism from farmers’ organisations and small-scale mill owners, who argue that importing rice varieties while the domestic harvest is underway undermines the local industry and threatens the livelihoods of those working in the sector.

A familiar pattern 

In Akuressa, Matara, small-scale rice mill owners say the Government’s latest decision has placed renewed pressure on their already struggling businesses. 

Sunil Kumara, who operates a family-run mill in the area, said promises to dismantle what he called the “rice mafia” had repeatedly failed to materialise, regardless of which party came to power.

“This is the same pattern we have seen for years,” Kumara noted. “Large-scale millers buy up paddy at low prices during the harvest and stockpile it, and when the Government announces a shortage, imported rice floods the market. It leaves millers like us with no buyers and no way to compete,” he said. 

According to Kumara, the lack of storage capacity puts small- and medium-scale mills at a severe disadvantage. While larger operations can hold on to stock for months, waiting for prices to rise, small operators must sell quickly to cover operational costs. The arrival of imported rice, he said, immediately depressed demand for locally milled varieties, often forcing small millers to scale down or suspend operations altogether.

Similar concerns were raised in Sooriyawewa, Hambantota, where farmers are now preparing to bring in their Maha season harvest. Chandrani Wijesena, a paddy farmer in the area, questioned the Government’s claim of a keeri samba shortage, arguing that it did not reflect the situation in cultivation areas.

“We grew keeri samba this Maha season because the Agriculture Department forecast was good,” Wijesena said. “Now, before our harvest is even collected, we hear there is a shortage and imports are coming in.”

Wijesena added that without a reliable State purchasing mechanism or direct market access, small farmers were compelled to sell to millers, often at rates below the Government’s gazetted price. She said that even when a controlled price existed, millers cited financial constraints and offered lower rates. Farmers refusing to sell at those rates risk having their harvest spoil in storage.

Fluctuations in imports 

Adding further context to these concerns, recent data from the Agriculture Sector Data Bulletin issued by the Central Bank of Sri Lanka (CBSL) for May 2025 shows significant fluctuations in rice imports over the past four years. 

While rice imports remained negligible until October 2021, volumes surged sharply thereafter, peaking at over 120,000 MT by January 2022. Another notable spike was recorded in November 2024, when import volumes once again exceeded 100,000 MT.

Despite these import surges, official production data indicates a relatively stable domestic harvest. According to the Department of Agriculture, total paddy production for 2024 was recorded at 4.7 million MT, reflecting a 4.1% increase compared to the previous year. 

The department’s forecast for the 2024/2025 Maha season stands at 2.62 million MT – a modest 3.8% decline from the previous Maha season but still within normal seasonal variations.

‘No keeri samba shortage’ 

Farmers’ groups and mill owners have pointed to these figures in challenging the Government’s recent claims of a domestic rice shortage. Many argue that with stable or improved production levels and the Maha harvest currently underway, the decision to import rice substitutes risks disrupting local markets and placing additional strain on small-scale producers and processors.

In Polonnaruwa, long-time paddy farmer Jayasiri Bandara questioned the Government’s claims of a rice shortage, stating that local stocks of keeri samba remained sufficient. “We have enough keeri samba. Our harvest will be ready for sale in a few weeks. Where is the shortage?” Bandara questioned.

He further highlighted discrepancies between official prices and actual payments received by farmers. “The Government sets a price of Rs. 135 per kilogramme for paddy, but millers often offer Rs. 120 or less. If we hold back our crop, it risks being spoiled,” he explained. 

Bandara pointed out the disparity between these farmgate prices and retail rice prices, which currently range from Rs. 235 to Rs. 240 per kilogramme in markets such as Pettah and Dambulla.

For Bandara, a key part of addressing the issue lies in decentralising rice storage and distribution. “If local cooperatives or small-scale mills received adequate State support and storage facilities, this monopoly would not persist,” he said. “Right now, most decisions are made in Colombo without properly considering the realities faced by farmers and millers in the districts.”

Harmful impact on local industry 

Meanwhile, in Uhana, Ampara, medium-scale mill owner Kamal Perera voiced concerns that the planned import of rice substitutes would further exacerbate challenges for smaller operators. “Imports reduce demand for local rice. Larger mills can afford to lower their prices temporarily to push smaller competitors out of the market, only to increase prices again once those competitors have exited,” Perera said.

He noted that larger mills had easier access to bank financing, favourable storage facilities, and more efficient transport networks. In contrast, small- and medium-scale mills often face cash flow constraints and lack market security. “If the Government continues importing during harvest periods without consulting regional millers, many small mills will eventually be forced to close,” Perera warned.

National Agrarians’ Unity President Anuradha Tennakoon said the decision to import 40,000 MT of rice substitutes, including ponni samba, was an unnecessary intervention that risked harming the local industry.

“There is no shortage. The Maha harvest is already underway. The Department of Agriculture’s numbers confirm this. The decision to import isn’t about shortage; it’s about stabilising prices in a market controlled by a few large-scale mill owners,” Tennakoon said.

Tennakoon explained that traditionally, these large millers held back stocks, creating an impression of scarcity. “Then, when the Government acts by allowing imports, prices drop temporarily, only to climb again after small millers and farmers are pushed out,” he said.

He called for the establishment of an independent regulatory body to oversee paddy procurement, rice pricing, and storage disclosures. “A transparent system where large mill owners declare their stocks and Government procurement happens at fixed prices would protect farmers and small millers alike,” Tennakoon suggested.

As per the CBSL Daily Price Report, wholesale prices for samba stood at Rs. 240 per kg in Pettah and Rs. 240 per kg in Dambulla last week.

In December 2024 alone, Sri Lanka imported 167,000 MT of rice, including 66,000 MT of red raw rice and 101,000 MT of parboiled rice. The Government initially permitted private sector imports from 4-20 December 2024, extending the deadline to 10 January eventually.

Govt. assurances 

When contacted by The Sunday Morning, Ministry of Agriculture Secretary D.P. Wickremasinghe assured that the Government’s decision to import rice would not negatively impact paddy prices in the country. 

He emphasised that the Government had already established a certified purchasing price for paddy, ensuring that farmers received fair compensation for their harvest.

Wickremasinghe explained that the planned rice imports, totalling 40,000 MT, would not enter the market all at once. Instead, the imports will be introduced gradually in stages to avoid market disruption. 

He further noted that as this process unfolded, it was expected that rice stocks allegedly being withheld to create an artificial shortage would gradually be released into the market.