ECONOMYNEXT- Sri Lanka’s main rice millers are making 50 billion rupees in profits in a single season Agriculture Minister Mahindananda Aluthgamage said as import controls prevented imports coming into the country allowing billion to be made in many ‘import substitution’ sectors.

In the past two cultivation seasons farmers had produced around 5.3 million kilograms of paddy from which would 3.2 million metric tonnes of rice can be produce, he said.

“There is a mafia of four five main millers,” Alutgamgage thundered in parliament on Monday, which was debating a Presidential declaration of emergency laws as prices of essential goods rose.

“Their profit in a single season is 50 billion rupees.

“They bought nadu paddy at 55 rupees a kilogram from farmers and are selling it at 125 rupees a kilogram.”

“Samba paddy was bought at 60 rupees sold samba at 160 rupees. Keeri samba paddy was bought at 60 to 65 rupees. They sold keeri samba at 225 rupees.”

He said laws will be brought to fine millers 20 million rupees.

Opposition legislator Ranjith Maddumabandara said the millers were close supporters of the government and some were related to a sitting member of parliament.

“Two of the biggest rice millers are inside the parliament,” he said. “The other main person is the brother of a person inside the parliament. They are all with the government. Why can’t you catch them?”

He charged that emergency law was brought to suppress dissent as unrest rose among people.

Maddumabandara said the government lifted port charges for 600 containers of sugar at the port.

Sri Lanka has been facing intensified foreign exchange shortages as the central bank printed large volumes of money as bond auctions failed due to price controls.

Many import containers had got stuck at port awaiting foreign exchange from banks or until they accepted the documents.

Sri Lanka has printed around a trillion rupee of money for monetary ‘stimulus’ under so-called Modern Monetary Theory, after taxes were cut in December 2019 in a fiscal ‘stimulus’.

Foreign exchange shortages from printed money have triggered a series of import controls.

Sri Lanka has restricted rice imports for many years to keep domestic prices higher than world prices in an ‘import substitution’ strategy.

However over the past year global rice and wheat prices have also spiked as the US printed money and Fed Chief Jerome Powell fired a commodity Bubble.

Amid import controls many import substitution companies listed in the stock market have also made record profits.

Import substitution became popular in Latin America partly due forex shortages that came from soft-pegged central banks. (Colombo/Sept06/2021)