Sri Lanka’s rice sector, long considered the backbone of the country’s food security, is facing a crisis that exposes deep systemic problems and unfulfilled government promises. According to farmers and union leaders, the government’s much-publicized plans to purchase paddy at guaranteed prices have yet to reach the people who grow it. Meanwhile, private traders and large-scale mill owners continue to exploit the situation, buying paddy at a fraction of its value and selling it at exorbitant prices to consumers. This ongoing imbalance has raised concerns about the influence of politically connected millers and the inefficiency of government institutions responsible for regulating the sector.
During the 2025-2026 Maha season, the government announced paddy purchase prices of Rs. 140 per kilo for Kiri Samba, Rs. 130 for Samba, and Rs. 120 for Nadu. More than 166 Paddy Marketing Board centers were prepared to facilitate purchases, and the Board itself reported acquiring 5,000 metric tons, with significant contributions from the Ampara and Polonnaruwa districts. The government claimed it had allocated Rs. 10 billion under the initial phase to support farmers and stabilize the rice market. Yet, despite these assurances, farmers across the country report that the Board’s warehouses remain closed or filled with leftover paddy from previous seasons, making it impossible for them to sell their newly harvested crops at the guaranteed prices.
Farmers in areas such as Mahaweli H, Walawa, and Vavuniya describe a troubling scenario. Businessmen and large-scale mill owners are arriving at paddy fields during harvest, offering between Rs. 72 and Rs. 85 per kilo—far below the government-set prices. This practice forces indebted farmers to sell prematurely, sacrificing their profit margins to cover loans and immediate expenses. “We cannot wait for the warehouses to open because we have to pay off the loans,” said Athula Dissanayake, a Mahaweli H farmer. Others, like H. L. Darshana Thushara and Gamini from Walawa, emphasize that rain and logistical challenges prevent proper drying of the paddy, leaving farmers vulnerable to low-ball offers by traders. The outcome is that farmers are left with minimal income while mill owners enjoy windfall profits when selling rice at Rs. 200 or higher per kilo, creating what Anuradha Thennakoon, chairman of the National Farmers’ Union, calls “illegal profits from every kilo of rice.”
This imbalance is not new. Thennakoon notes that historically, paddy was often purchased for less than Rs. 100 per kilo, with wet paddy sometimes going for under Rs. 80. “The businessmen engaged in this rice industry earn an unfair profit of Rs. 30-40 per kilo of rice by buying paddy from the farmer,” he said. “Neither the farmer nor the consumer benefits. That benefit goes only to the mill owners who drive luxury vehicles.” Many of these millers are alleged to have strong political connections, allowing them to maintain monopolistic control over the market. Analysts say that the system has effectively enabled a “rice mafia” to thrive, dictating prices and supply, and undermining the government’s regulatory efforts.
Government officials argue that the Paddy Marketing Board and affiliated institutions such as Lanka Sathosa and the Cooperative Network are making progress. Over 220 Board warehouses exist nationwide, with a total procurement target of 210,000 metric tons for the Maha season. However, for decades, the Board has struggled to maintain efficient operations, and strict procurement standards—such as a maximum moisture content of 14%—have inadvertently hindered farmers from selling directly to the Board, creating opportunities for private intermediaries to exploit the market. Farmers claim that this longstanding structural weakness continues to give unfair advantage to millers, allowing them to purchase wet paddy cheaply and sell it at inflated prices.
The impact of this system is evident in the consumer market. Rice prices have surged dramatically, with a kilo of Nadu rice reaching Rs. 180 and Samba varieties climbing even higher. The government has responded by imposing fixed prices, but critics argue this only masks the deeper structural issues. The same millers who benefit from cheap paddy maintain tight control over supply, often deciding whether rice shortages will necessitate imports, which in turn inflates prices and reinforces their profit margins. “Today, large-scale mill owners decide whether there is a shortage of rice in the country, whether it should be imported from abroad, or whether there is a shortage of paddy,” Thennakoon said. “The current government, like previous ones, is giving them the opportunity to earn illegal profits.”
Political analysts point out that the relationship between mill owners and politicians has long shaped the rice industry. Many of the country’s prominent millers have maintained close ties with successive governments, using campaign contributions and lobbying to protect their interests. The promise to dismantle the so-called rice mafia, which was a significant part of election rhetoric, has largely gone unfulfilled. Farmers’ voices suggest that instead of curbing monopolistic practices, the government has tacitly allowed them to continue, sometimes even facilitating price increases after lobbying by mill owners. The narrative is clear: wealth and political influence often outweigh government policy, leaving ordinary farmers to bear the brunt of a system skewed in favor of powerful players.
The consequences extend beyond economic inequity. With farmers forced to sell at low prices and consumers paying high rates, food security and rural livelihoods are under threat. The disparity between paddy procurement costs and retail prices highlights an imbalance that undermines trust in both the market and government oversight. Farmers argue that unless the Paddy Marketing Board fully operationalizes its warehouses and enforces fair procurement standards, this cycle will continue. “Even though the government gives Rs. 120 per kilo as a guaranteed price, wet paddy is bought at Rs. 85,” said Gamini. “The profit goes to the rice traders. The farmer and the consumer are left with nothing.”
As the 2025-2026 Maha season continues, the central issue remains: can the government assert control over a market dominated by politically connected mill owners, or will the rice mafia continue to dictate both supply and pricing? For now, farmers are caught in a precarious position—harvesting crops that could bring them debt relief, yet being forced to sell at a fraction of the value, while middlemen and millers reap profits that dwarf their own. Analysts warn that without decisive intervention, the cycle of exploitation will persist, reinforcing systemic inequalities and undermining public confidence in the government’s ability to manage the nation’s most essential commodity.
In a country where rice is both a staple and a symbol of economic stability, the stakes are high. Farmers’ livelihoods, consumers’ access to affordable food, and the credibility of government institutions all hang in the balance. As political promises to dismantle the rice mafia clash with entrenched market realities, the question looms: will Sri Lanka finally see reform that benefits those who feed the nation, or will the rice mafia continue to thrive unchecked, leaving the country’s most vulnerable to bear the cost?
