Business · Sri Lanka Bureau
Sri Lanka launches Rs7.5bn interest-free loan scheme for paddy purchases
The government has approved a major interest-free loan facility to support paddy purchasing across the country. The initiative aims to address capacity constraints at the state-run Paddy Marketing Board.
LSN Sri Lanka ·
Sri Lanka's cabinet has approved a Rs7.5 billion interest-free loan scheme designed to facilitate paddy procurement from farmers nationwide. The facility represents a significant intervention in the agricultural sector as the government seeks to stabilize rice production and support cultivators.
According to officials, the Paddy Marketing Board currently lacks sufficient capacity to purchase the entirety of the country's paddy harvest. The interest-free loans are intended to enable alternative purchasing mechanisms and private sector participation in grain procurement, thereby expanding the market's absorption capacity.
The scheme addresses longstanding concerns about farmer welfare and rice supply security. By reducing borrowing costs for paddy purchases, the initiative aims to improve price realization for cultivators while ensuring adequate grain stocks for domestic consumption and export.
The government has positioned the loan facility as a complementary measure to existing procurement operations. Officials have indicated that the expanded purchasing capacity will help stabilize agricultural markets and support rural livelihoods during peak harvest seasons.