RICE: Economic Boom or Bust?

Part V

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 six decades has increased by 12 times!

He points out the tremendous demand for rice, ease of handling the grain, especially in terms of storage, and as a crop the only use that can be made out of marshy lands. He continues that with our technology and our unique hydraulic systems our high productivity and asserts that history has proven that rice is more than our staple, but also our stronghold against our many enemies.

He then describes that while countries like Australia are making a concentrated effort in the past century to create a viable export and domestic industry, we have decreased our rice consumption for wheat. Dr. Abeysiriwardena cautions the vulnerability we are faced with by becoming dependant on the import market for our staple.

The discussion continues

Before colonisation we had over 300 varieties of rice and though countries like India produced a greater variety than this, our ability to produce comparatively larger quantities earned us the recognition as the 'Granary of the East' says Dr. Abeysiriwardena.

However, during the relatively short space of 300 or so years of European occupation, our rice industry suffered severely and by the time we regained our independence, it has dwindled to a handful of varieties that were fit for commercial production.

Also, during our time of being part of a colony, our habits also changed and we became accustomed to another staple - wheat. As wheat is not grown in Sri Lanka but imported, it took a heavy toll on our foreign exchange.

The Crown was not altogether concerned about this heavy expenditure for two main reasons. One being that it kept us dependent on the Western powers and the other being it kept us from becoming independent by becoming self-sufficient. However, the world calamity of World War II brought a severe food shortage and the Crown struggled to feed its subjects. As a solution they introduced other substitutes such as dhal and potatoes into the Sri Lankan diet.

The Crown was lucky that by this time the majority of Sri Lankans was happy to emulate the ways of the West and took to the new diet without too much of a grumble. In fact, it became such a novelty that potato dishes quickly became part of the menu of special meals and functions. Fortunately however, the lesson to be self-sufficient was not lost upon the future leaders of the country.

Thus, according to Dr. Abeysiriwardena, all political leaders of this country since independence, despite their diverse political agendas have supported the rejuvenation of the rice industry.

This is the main reason for our rice productivity to increase by 12 fold over the last sixty years notes Dr. Abeysiriwardena. He continues that because of this concentrated effort by all the governments since independence we do not need to import even 1 per cent of our requirement. The only reason for the governments to resort to importing rice is to control the price and these are only taken as short term measures than long term.

The need to control price arises due to two main reasons: the foremost is the unpredictability associated with the actual harvest of any crop and the other being our dependency on wheat and hence the fluctuating world market price of wheat.

The better answer to both these dilemmas lies in proper maintenance of buffer stock notes Dr. Abeysiriwardena. Of course the creation of a buffer stock comes with its own set of problems and is not as straightforward as it seems, he cautions. Thus, the process of creating such a stock needs to be done with care and forethought notes Dr. Abeysiriwardena.

To be continued