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Government has not “surrendered to big rice millers” – Bandula

ECONOMYNEXT- The government is dismissing allegations that it has given in to the so-called “Rice Mafia” by increasing the controlled price of rice from Rs 90 per kilo to 98.

Media Minister and Co-Cabinet Spokesman Bandula Gunawardena told reporters today May 28, that the higher price was fixed because “there were problems in practically applying it (the lower fixed price) in the market.”

He made this statement to a question raised about the increase in rice prices at the cabinet briefing held this morning.

He said that even though the government priced rice at Rs 98 previously after agreeing with rice mills trade organisations, the government again tried to reduce the rice prices further in order to provide relief to the consumers.

As EconomyNext reported the Rs 90 price tag was unrealistic as millers could not make a reasonable profit at that level.

Therefore in order that Rice Traders purchased their product, the millers were forcing the traders to purchase quantities of high-end Keeri Samba at an inflated price of Rs 125 per kilogram if they wanted the lower graded rice at Rs 90.

The government began intervening in the rice market after the price of the staple commodity rose sharply over the Rs 100 per kilo mark immediately after President Gotabaya Rajapaksa was elected in November last year.

It has periodically tried to impose price controls and had discussions and tried various methods of trying to get the big-time millers to cooperate.

Opposition politician and former minister Dr Harsha de Silva has blamed the government for killing off Small and Medium-Sized millers cooperatives which offered rice at a lower rate and acted as a brake on the big millers.

Gunewardena said that the President and the Consumer Affairs Authority at last after all interventions decided to maintain rice prices below Rs 100 in order to prevent a rice shortage.

“It is neither a victory nor defeat of anyone, it is a victory from the side of the consumers as a decision was taken to stop shortage from happening and the black markets that would appear if a shortage happens,” Gunawardena said.(Colombo/May28/2020)

Reported by Imesh Ranasinghe