Sri Lanka’s rice shortage is not a farming disaster but a man-made crisis born from price controls, distorted incentives, and years of ignoring real consumer demand — leaving farmers helpless, consumers frustrated, and the entire market vulnerable to manipulation.
For a nation that often boasts about food self-sufficiency, Sri Lanka’s repeated struggles to keep rice affordable and available have become a familiar cycle of crisis. Although rice remains the backbone of national food security, the industry continues to suffer from unstable harvests, unpredictable weather, and sudden policy changes. In the latest Maha season, Sri Lanka cultivated 701,453 hectares, producing around 2.7 million metric tonnes of paddy. Yet despite this dominance in agricultural land use, productivity has stagnated and even declined in recent years due to input shortages, climate pressure, and long-standing structural weaknesses.
The government’s recent purchase of over 40,000 metric tonnes of paddy through the Paddy Marketing Board under a Rs. 60 billion procurement programme reflects continued attempts to stabilize supply. However, despite such interventions, the rice market still experiences periodic shortages and sharp price fluctuations that frustrate both farmers and consumers.
These recurring disruptions highlight a deeper fragility in Sri Lanka’s rice sector, which has been shaped for decades by price controls intended to protect consumers. Instead of stabilizing the market, these controls have distorted incentives throughout the value chain, discouraging long-term investment in production, storage, and distribution. As a result, the system ends up creating the very instability it aims to prevent.
The recent shortage of keeri samba rice is a clear example of the structural problems embedded in the industry. Keeri samba is especially popular among urban consumers in the Western Province because of its taste and texture. Yet it receives minimal government support. Subsidized seed paddy provided by the Department of Agriculture and PMB focuses on Nadu and other high-yielding varieties, which are cheaper and easier to produce at scale. The government also lacks detailed consumption data by variety, forcing policymakers to rely on rough averages.
The Household Income and Expenditure Survey (HIES) offers some insights, but it does not include variety-specific rice demand. Conducted only once every five years, it also fails to capture swift changes in consumer preference. As a result, farmers often cultivate what is subsidized rather than what consumers want. This mismatch has caused keeri samba acreage to fall steadily, making up only 14 percent of total paddy cultivation during the 2024 Yala season. With no targeted planning, keeri samba production remains vulnerable to weather shocks, storage losses, and the opportunistic stockpiling that appears whenever shortages emerge.
Another major weakness in the rice market is the dominance of a small number of powerful millers. These millers have the financial strength and infrastructure to buy large volumes of paddy immediately after harvest. With substantial storage capacity, they can control supply and influence prices throughout the off-season. This imbalance is worsened by the state’s severe data gaps. Without accurate consumption or stock data, the government often reacts to crises rather than preventing them.
Meanwhile, millers operate with far more information and resources. They can predict demand patterns, release stocks strategically, and benefit from price spikes. The outcome is a predictable cycle of shortages driven not by production failure but by skewed incentives and concentrated market power.
The long-standing preference for keeri samba has turned it into a premium variety, and the price gap between Nadu and keeri samba has widened further as household incomes recover after the economic crisis. Yet when the government imposes price controls during shortages, the outcome often backfires. Price ceilings set below market levels discourage traders from selling openly, creating artificial scarcity. When legal sales become unprofitable, rice shifts into informal networks where it is sold at higher prices. This shadow market benefits only a few well-positioned actors while ordinary consumers pay more.
The distortions extend to imported rice as well. A recent gazette introduced price caps on imported varieties to address the keeri samba shortage. But such controls, imposed without reducing import restrictions or tariffs, only intensify scarcity. Traders cannot import at a loss, and government price ceilings often fail to reflect real import costs. This creates a system where official prices are meaningless, and supply dries up even further.
Ultimately, Sri Lanka’s rice shortages are symptoms of deeper structural problems. Uneven seed distribution, rigid price controls, inadequate data collection, and concentrated market power combine to undermine both farmers and consumers. Instead of responding to real market signals, the system encourages inefficiency, opacity, and manipulation.
To restore stability, policymakers must shift from outdated control-based approaches to coordinated, data-driven reforms. Improving variety-specific data collection, aligning seed distribution with actual demand, liberalizing prices, and opening the market to greater competition are essential steps to create a rice sector that is efficient, fair, and resilient.
