The government has opened its 2026 Yala season paddy purchasing programme to small and medium-scale rice mill owners and cooperative societies, offering them interest-free financing of up to Rs. 25 million each to buy paddy directly from farmers.
The scheme is intended to hold farmgate prices at the guaranteed level while keeping retail rice affordable, and to give smaller millers a share of a purchasing round that larger operators have historically dominated.
Who qualifies and on what terms
Registered small and medium-scale mills with a maximum daily milling capacity of 25 metric tonnes are eligible, as are cooperative societies running mills of the same size. Hiru News reported that the Ministry of Finance is providing the concessionary credit.
Participants must buy the quantity of paddy recommended by the Agriculture Research and Production Assistant for their area, and must pay the government’s guaranteed prices: Rs. 120 per kilogram for standard-quality red and white Nadu, and Rs. 130 per kilogram for standard-quality Samba.
The full amount borrowed must be repaid from the proceeds of the paddy purchased, within a maximum of 240 days from the date the funds are received. No interest, commission or other charges apply.
Administration
The programme is being run by District Secretaries and the Department of Agrarian Development with support from the Ministry of Agriculture, Livestock, Land and Irrigation, under the supervision of the President’s Office and the Ministry of Finance, Planning and Economic Development.
The 2026 Yala purchasing round began on August 12. Mill owners and cooperative societies must register at their District Secretariat office before they can start buying.
From proposal to programme
The launch puts operative terms on a mechanism floated a week ago, when mill owners met President Anura Kumara Dissanayake and asked that purchase funding be routed through District Secretaries rather than banks. At that stage the government had committed only to a Rs. 120 floor price and a plan to discuss a lending mechanism; the borrowing ceiling, the 25-tonne capacity threshold, the Samba price and the 240-day repayment window are new.
Finance Ministry officials had warned at that meeting of difficulties recovering money lent under earlier paddy-purchase schemes — a concern the repayment-from-proceeds condition appears designed to address.
The Yala harvest is arriving as drought conditions grip large parts of the dry zone, with national reservoir storage down to 37% of capacity. The Paddy Marketing Board began its own Yala purchases earlier this month.
