Subsidised loans for millers to purchase paddy at minimum price

Minister Bandula Gunawardane
Pic by Kithsiri De Mel

The government has decided to provide subsidised loans at 8 percent interest to millers to purchase rice from farmers at a minimum price of 
Rs.50 per kilogram. The government expects 3 million MT of paddy harvest this Maha season, which would be worth around US$ 1.5 billion. The Cabinet of Ministers on Tuesday decided to intermediate to purchase the excess rice stocks, ensuring a minimum price for farmers. Accordingly, Cabinet Co-Spokesperson and Information & Communications Technology, Higher Education, Technology & Innovations Minister Bandula Gunawardane announced yesterday that Rs.100 billion will be disbursed among small, medium and large scale millers at concessionary rate of 8 percent to purchase paddy from farmers at the minimum price.

He noted that millers have already been directed to purchase standard paddy with low moisture levels at Rs.50 per kilo and paddy with high moisture levels (wet paddy) at Rs.45 per kilo. The Treasury is expected to release funds to Regional Development Bank, Bank of Ceylon and People’s Bank to be disbursed among the 
millers shortly. 

Further, State entities have also been advised to purchase paddy directly based on their requirement. 

Although, retail rice prices have reached Rs.98 per kilo at the moment, the Minister stressed the country would save around US$ 100 million by restricting 
rice imports. 

Due to an unexpected bumper crop this Maha season, the government expects the retail prices of rice to come down to Rs.90 per kilo by April this year.