Sri Lanka rules out removing rice price controls

July 06, 2009 (LBO) – Sri Lanka’s government which restricts the import of rice and has imposed high tariffs on substitute carbohydrates says ‘price controls’ on rice will remain, blaming a milling oligopoly for high prices.

Potatoes are charged a 15 rupee tax per kilogram.

The government also allocates money to buy rice to keep farm gate prices above 30 rupees, while juggling to also control retail prices.

But price controls even apply to branded rice. Branding is a key tool to lift agricultural products from a basic homogenous commodity with wildly fluctuating prices to a processed good with customer loyalty.

Increased Production

Private sector representatives at the economic summit organised by the Ceylon Chamber of Commerce countered, saying enough production was ensured with more areas coming under paddy cultivation.

B R L Fernando, non-executive chairman of Chemical Industries (Colombo) said that with the island achieving self-sufficiency in rice production, there was no way prices could rise too high.

He said the end of the ethnic war meant rice cultivation in the eastern province which had been disrupted by war is being revived.

“We are achieving self sufficiency in ri