The rice crisis continues with the government unable to meet its promise made earlier in the year that prices would be reduced and stabilised by the New Year in April.

The Sinhala and Hindu New Year has dawned and rice prices have skyrocketed to over Rs.90 per kilo in most areas. The government for its part has only been offering the odd statement that the country would be receiving rice imports at some point during the month, by way of relief.

Consumer Affairs Minister, Bandula Gunawardena left for Myanmar earlier in the week in search of rice. He returned on April 9 with Myanmar pledging support — agreeing to send a load of 50,000 mt of rice as the first batch.

However, this first consignment is expected after the New Year. Gunawardena told The Sunday Leader that the shipment could be expected ‘within the course of the month.’

"Myanmar is also celebrating a new year called Sankranthi during this period and the rice would be sent after that, so it should reach Sri Lanka sometime this month," he said. Gunawardena said that he had also requested for a second consignment of another 50,000 mt of rice after the first batch.

"The Myanmar government has agreed to that as well," he said. According to Gunawardena, the rice shortage has been addressed and prices would now come down following these shipments.

That however is little relief to the consumer who has had to pocket out Rs.90 for a kilo of rice to make his kiributh to celebrate the New Year.

Gunawardena says that the initial plan by certain traders was to increase prices to Rs.150. However, he said that rice prices vary between Rs.51 and Rs.74 in the Cooperatives.

Interestingly, the Cooperative network covers only 60 lakhs of the country’s population. According to Gunawardena, the government has ‘looked after enough people in the country.’ "People can go to the Cooperatives to buy rice at reasonable prices. About 60 lakhs of the country’s population is serviced by the Cooperatives, and that is more than enough. The rest can do their shopping at the supermarkets. Even the supermarkets have to survive," he observed. Therefore, a certain section of the population would have no option but to purchase rice at higher prices was his contention.

The shocking extent to which the price of rice has increased was witnessed when a kilo of rice kept increasing by at least Rs.10 every week. The increase has been attributed to a rice shortage in the local market.

According to the Department of Agriculture, an anticipated shortfall of 10% between local production and demand increased to 12.5% following the recent rains.

Agriculture Department officials predicted that the crop failure due to bad weather might not have a significant impact on farmers. Although farmers were in a position to earn between Rs.32 to Rs.35 per kilo, a quality drop in the yield already harvested was inevitable since farmers were unable to find proper storage facilities for their crops.

Agriculture Minister Maithripala Sirisena said that there has been a 50% decline in wheat flour consumption which has in turn resulted in increased rice consumption. The government, he assured, ‘would take every possible step to ensure the smooth supply of rice to the market in the future.’

According to the Census and Statistics Department, paddy production has recorded a decline of 4.1% due to hostilities in the east and bad weather in some other parts of the island in the third quarter of 2007.

Rice prices which escalated to over Rs.100 per kilo in January, started to decline with the government permitting the importation of a limited quota of rice. Rice importers alleged that the state control of rice imports prevented cheaper foreign rice from stabilising prices in the market.

Last November the government exempted the Rs. 20 import duty on rice for a state firm and permitted the importation of 75,000 metric tonnes of rice from India. However, even this did not reduce the rice prices as expected.

The government in a bid to resolve the impending rice shortage and price hike in the market has now allowed rice to be imported to the country by importers sans any import duty.

All in all it is too little too late and the result is a bleak New Year.