RICE: Economic Boom or Bust? Part IV

Bojoon.com and CIC has teamed up to review one of the most controversial debates of Sri Lanka - is rice as an industry worth the effort.

The discussion so far...

Rice as an industry comes under heavy fire as an unprofitable venture notes Dr. Sumith Abeysiriwardena - Senior Consultant Researcher of CIC Agri Businesses. Yet, he points out, instead of being abandoned as such, rice production over the last 6 decades has increased by 12 times! He continues that as the staple of 140 countries, and consumed by 180 more countries, there is a tremendous demand for rice.

As a crop, this is the easiest grain to handle, especially in terms of storage. Also, rice cultivating is the only use that can be made out of marshy lands. Due to the high technology and the unique hydraulic systems of Sri Lanka, our production is very high - almost as high as the highest producer of the region, Indonesia.

History proves that rice is not only our staple, but also our stronghold against our many enemies asserts Dr. Abeysiriwardena. Though rice farming is projected as obsolete, many countries including Australia appreciate the value of rice and has created a viable export and domestic industry in less than a century.

The discussion continues:

Long after we regained our independence we remained chained to the whims of the International community for we were no longer self-sufficient, states Dr. Abeysiriwardena. Though our entire population was 6 million, we were importing 60 per cent of our foods.

There were a number of reasons for this insufficiency, notes Dr. Abeysiriwardena. One of the main reasons was that our productivity was so low that we were only producing about 1 tonne / hectare of rice. The other main reason is that we had become used to consume wheat-based products. Our annual per capita consumption of rice used to be 100 kg, but since the increase consumption of wheat-based products, this rate was drastically reduced to about 35 kg.

Dr. Abeysiriwardena cautions that this dependency on wheat-based products could create a very dangerous complication. Currently, there is a delicate balance between the rice produced and the wheat imported. Today, within this balance, we are near self-sufficiency. However, if something was to happen to change this balance, then the country would be grappled with a serious issue warns Dr. Abeysiriwardena.

For example, if wheat was marketed at a lower price than rice, then the consumption of wheat would increase and rice decreases. This would create a surplus of rice in the market, which in turn would lower rice prices.

When the farmer cannot meet his production costs he faces a financial catastrophe for he will not be able to serve his bank loans and meet his living expenses till the next cultivation cycle. With farmers constituting a large segment of the population, their problems would create a significant impact on the incumbent government.

When the rice prices lowers and rice cultivation becomes a profitless enterprise, fewer farmers would grow rice. As the productivity drops if wheat prices were to increase, there would be an increased demand for rice.

With a shorter supply and an increased demand, the market prices for rice would also inflate. As the prices of both staples - rice and wheat - rises, people would be directly affected. The steeper the rise in prices, the more vulnerable the incumbent government becomes as food is the most basic necessity to man, notes Dr. Abeysiriwardena.

Therefore, he says, that while we remain strong consumers of exported food products like wheat, we remain vulnerable to the manipulations of adverse external forces. These changes take place so very subtly that unless a keen observer, often the implications of these changes are not recognized in time.

The markets are thus manipulated for a myriad of reasons and not necessarily to promote an agricultural produce. Many a time, the cause is totally unrelated to agriculture, but with the resulting vulnerability, governments are more easily coerced into situations that in effect are detrimental to the country.

Join Daily News next Friday as bojoon.com unravels with CIC many mysteries and misinterpretations surrounding rice cultivation in Sri Lanka.

Share your own opinion by simply dropping an email to info@bojoon.com. For more information visit www.bojoon.com.

Sandamalee de Fonseka is the founder of www.bojoon.com that is both the organiser of action-packed one-on-one cooking programs with top chefs of Sri Lanka, and the portal of food in Sri Lanka.