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SRI LANKA: Beating Grain Prices With Home Grown Rice

Feizal Samath

COLOMBO, Apr 15 2008 (IPS) - Drastically lowered wheat consumption in this island country – once running close to that of the domestically grown staple rice – has been welcomed by food security experts as the only way to beat the current rise in global grain prices.

President Mahinda Rajapakse is among those who have publicly welcomed the reversal in the dietary habits of Sri Lankans and the return to rice and pulses.

"I am exceedingly glad at the fall in consumption of wheat-flour based products. Despite the fact that we possess very fertile lands, the consumption of (imported) wheat was forced upon us, initially by the provision of wheat free of charge, and later on credit, until we were addicted to it," the President told a meeting of his nationalist Sri Lanka Freedom Party earlier this month.

On Friday, the Rome-based Food and Agricultural Organisation (FAO) listed Sri Lanka among 14 countries facing &#39food emergencies&#39 due to rising prices.

Asian countries in the FAO list included Sri Lanka, Bangladesh, the Philippines, Tajikistan and Armenia while Cote d’Ivoire, Senegal, Nigeria, Somalia, Sudan, Uganda, Ethiopia and Mozambique figured under Africa.

Sri Lanka has also raised tariffs on imported grain and issued appeals to major rice exporters such as Indian and Vietnam for increased supplies of rice.

While neighbouring India, a major grower, has imposed restrictions on the export of rice to fight galloping inflationary trends at home, it has heeded to Colombo’s appeals and agreed to ship 100,000 tonnes of rice to help this country tide over shortages.

Nimal Sanderatne, an eminent Sri Lankan economist and expert on agriculture issues, said the trend for many years has been towards substitution of rice with wheat in rice-eating as well as rice- producing countries, mostly because of the convenience factor and because it was cheaper.

So what are people eating if one segment of their diet has been reduced? "Either they are doing away with a meal or eating some substitute," believes Sarath Fernando, a veteran campaigner for small farmer issues.

Fernando says the high cost of both rice and wheat flour in recent months has been exacerbated by sharply rising fuel costs which has and led to across-the-board price rises annual inflation rates of over 20 percent.

While the government has put the blame on international fuel prices and external shocks for rising inflation, the International Monetary Fund, in a report issued earlier in the month, said inflationary trends were more likely to be ‘’domestic in nature’’ and possibly the result of mismanagement.

Some unofficial figures show that consumption of bread and wheat-based products has fallen by as much as 40 percent, though government officials are unable to confirm these figures. Wheat grain imports have been hovering around 80,000 metric tonnes per month in recent months, compared to around 120,000 metric tonnes a month about five years ago.

Rising cost of imports, a sizable budget deficit and weakening balance of payments, plus less concessionary loans from multilateral donor agencies caused the government to launch a &#39grow more food&#39 campaign in September.

The ‘National Campaign to Motivate Domestic Food Production 2007-2010’ under the theme ‘Let&#39s grow and build a Nation&#39 launched by Rajapakse is aimed at a paradigm shift in food habits and cutting the food import bill which stood at over Rs 100 billion (nearly one billion US dollars) annually.

Sri Lanka, once considered the &#39granary of the East,&#39 has shown that it could attain self sufficiency in food under similar campaigns launched by previous governments. "Unfortunately, in the recent past, we have distanced ourselves from local food cultivation and intensely depended on food imports. We have still not settled the debts which have been obtained to purchase wheat flour in the 1970s in the process," Rajapkse said at the September launch.

Sri Lanka was a recipient of wheat flour under the U.S. government&#39s Public Law 480 scheme in the 1970s where countries were permitted to purchase flour and pay in local currency.

One of the biggest critics of this scheme was the then finance minister N.M. Perera who said that at the rate the U.S. government was earning Sri Lankan rupees the country would be in deep debt to the Americans.

Wheat grain is now imported from Australia and other cheaper global sources by Prima Ltd, a Singapore-based miller with a plant in Sri Lanka, whose sole source till about five years ago was the U.S. Prima has its first competitor in a Dubai-based miller who has vowed that when its Colombo plant starts operating in May wheat flour prices are bound to fall.

Efforts to increase rice and reduce wheat flour consumption have been on for the past five years and there have been attempts at producing bread and other popular food items such as pastries using rice flour.

A government statement in September said the intention of the &#39grow more food&#39 campaign was to eventually stop food import which was draining foreign exchange reserves gained from tea and garment exports, and migrant worker remittances.

Sirimal Abeyeratne, an economist at the University of Colombo, says that Sri Lanka is not the only country where food habits have been changing and pointed to trends in Europe where rice is now increasingly being consumed. "This is part of globalisation," he said.

Campaigner Fernando welcomes the state policy of raising domestic food production and cutting imports but questions its ‘’shortsightedness’’. "The government should have a proper policy of improving domestic production. In this case, they are trying to solve a problem as response to insufficient money to import food," he said.

Under the campaign, the government hopes to create four million home gardens in the next few years and build food stocks. It is exercising the right to hand over unutilised land to willing tenants who will pay owner a small fee for the use of their land.

Economist Sanderatne sees benefits in the shift to more rice consumption, saying that the wheat flour consumed by Sri Lankans has far less nutritional value than rice. "What we get is different from other flour as over 70 percent of the wheat extracts (which has most of the nutrients) is exported," he said.