Mar 13, 2010 (LBO) – Sri Lanka is expected to re-erect an import barrier soon to keep cheaper rice out of the reach of the island’s consumers, but the country’s 25 rupee a kilo duty is too high, consumer affairs minister Bandula Gunewardene said. “I personally think the duty of 25 rupees on a kilo of rice is too high,” Gunewardene told reporters.
“I think a duty of about 15 rupees a kilo will be fairer. But the duty decision is made by the finance ministry. Nobody is importing now because the local harvest is coming in.”
Sri Lanka has a powerful rice milling lobby which is close to political power centres and rice farmers have also become an important power base and are also given a nationalistic flavour as ‘local producers’.
Sri Lanka’s rice and carbohydrate prices are high despite the government busting about 26 billion rupees a year on fertilizer subsidies.
Through Sri Lanka’s consumer affairs authority, Gunewardene has imposed price controls of 60 rupees a kilo for red rice and 70 rupees for the higher grade ‘Samba’ rice during the so-called ‘food crisis’ in mid 2008.
Sri Lanka’s rice prices have been permanently around ‘food crisis’ levels or higher.
International rice prices, which co