By Shabiya Ali Ahlam
The government’s decision to ban the importation of maize has met with resistance from the local poultry industry stakeholders as they asserted the move would only help feed the “maize mafia” that over the years has capitalised on the lack of timely availability of the crop, to manipulate the prices.
The government announced this week that effective from January 15, the country would ban the importation of maize and groundnuts, in an effort to protect the local farmers.
The poultry industry, which procures the majority of the maize crop for the manufacturing of poultry feed, however said the move, which is done every year, has little to do with supporting the farmers or ensuring the availability of the crop at a reasonable price for the poultry industry.
“This decision to impose a ban was made shortly after we met with the government officials. We clearly explained the impact an import ban brings to the price of maize procured locally. The mafia in the industry is making money by selling the crop at exorbitant prices. The farmers receive no gains,” All Island Poultry Association of Sri Lanka (AIPASL) Advisor/former Chairman Mathalee Jayasekara said.
While Sri Lanka has an annual requirement of 600,000 MT of maize for the poultry industry, the country has the capacity of harvesting only 250,000 MT. The shortage is imported on a quota basis, under the control of the government.
With the intention of protecting local farmers, successive governments have continuously imposed bans on maize imports for a period of about six months every year, usually from mid-January to July. It is only from August that the ban is lifted to allow the imports to meet the remaining 350,000 MT demand.
According to the poultry industry players, this strategy has not been well thought through as a number of traders (intermediaries) are using this decision to manipulate the availability and price of maize.
It was shared that such traders procure the bulk of the harvest from farmers at an average price of Rs.38 per kilo, which is stocked instead of making it available to the feed millers. The stored crop is only released during the off season, selling at an average price of Rs.80 per kilo.
“It is clear that the farmer makes no money here. It is only the middleman. It is neither fair nor helps the industry,” stressed Jayasekara.
He said the AIPASL is of the view that the government should allow the importation of maize throughout the year, so that it can be imported at a lower cost during the peak season.
“This way, there will be enough available and the traders will not be able to manipulate the prices as they are doing so now. Sri Lanka imports largely from India and Ukraine. Towards the mid part of the year, the exporters from these countries increase the prices as they know we are facing a shortage. This only adds to our problems. No one besides the intermediaries gain here,” he added.
Expressing similar sentiments, AIPASL Chairman Ajith H. Gunasekera, who is an agronomist, stressed the need to maintain stable prices year-round, so that the real beneficiaries are the farmers and poultry industry.
“For this, we need to develop proper trading systems. There is a dire need for proper dialogue with the government to safeguard the producers and consumers. It is corruption what is going on now. Suspending imports is not the solution to our problems,” he said.