Effectiveness of Imposing Maximum Retail Price and Import of Rice to Ensure Availability of Rice at an Affordable Price to Consumer

Abstract

The purpose of this study is to assess the effectiveness of imposing a maximum retail price of rice and import of rice to regulate the retail price of rice in the market to secure the consumer. Interviews were conducted with subject specialists in three key government organizations responsible for in intervening to rice market, two representatives of the rice miller association, and a representative of the importer’s association. Market prices of main rice types in Colombo districts, maximum retail price, seasonal production, and import figures were used from 2015 to 2022 in this study. Further, legal aspects and the regulations made by respective agencies were used. One sample t-test and right tail tests through SPSS software were used in data analysis. The results of the one-sample t-test and the right tail test proved that the market price was significantly higher than the maximum retail price of the selected main rice types throughout the study period from 2015 to 2022. In addition, the Study identified that the maximum retail price was not imposed in the critical periods, from October to January of the following year in certain years. Further, the Study identified in certain years that rice imports were made without considering the rice availability from local production. It may be due to the absence of a proper mechanism to assess the stock availability or rice importers get an opportunistic advantage to import rice. The study assumed that secondary data used in the study would represent the retail market price. Even though the market has different grades, the study considered only the price of grade 01 based on the availability of data. The results of this study provide new insights to policymakers and the key players in the industry to revisit policy formulations and implementations. Even though most of the researchers have conducted their research based on the value chain and market concentration, this study focused the impact of policy-level implementations.