The rice mills in Punjab are passing through a rough patch as they are having huge stocks of paddy meant for CMR (custom milled rice) piled up for unusually long.
Talking to Business Standard, millers from Patiala district told that the paddy that is stored with the millers in October/November should be milled by March to extract the best quality grain. But due to slack demand (slow movement of grain from the producer state to the consumer state), the milling is delayed.
“We have to spend a substantial amount on handling and storage to save the grain from rotting. Fumigation is required to retain the grain after a few months and we are not paid any extra amount for that”, said one of the millers.
The government warehousing corporations are given storage loss at 2.5 per cent that should be given to the private millers too.
He added that they got milling charges at Rs 15 per quintal which has not been revised for the past ten years and this was not viable.
Food Corporation of India officials told that tariff Commission has been appointed by the government to consider the revision of milling charges and the decision is awaited. He added that the millers have complete rights on the by-products of the rice extracted from paddy. The prices of products like rice husk and rice bran are increasing and this gives a cushion to the millers. But the millers are demanding storage and handling charges on monthly basis if the milling is not complete by March.
The millers are also lamenting the transport charges at Rs 0.50 per quintal per kilometer which according to them is not viable in the wake of increasing fuel cost. The transportation charges for the past three years are pending with the FCI towards the state government and the millers are awaiting their dues.
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The FCI is mulling to revise the transport charges (lifting of grains from mandis to the rice mills and transport of rice from mills to the railway wagons) for the millers. The decision would be taken by the Board of Directors of the FCI, said sources in FCI.
The millers are planning to suspend the operations in this season (commencing from October 2011) as they do not have any space.
The heldover stocks are maximum in the districts of Mansa, Bhatinda and Muktsar and the rice industry is pushing the state government to come for their rescue with an OTS (one time settlement scheme).
The officials in the Food and Supply Department acknowledged the space crunch but added that new capacities are being created to meet the shortage of space.
The state has also sanctioned additional 1.2 million tonnes capacity of storage to the present 9.7 million tonnes of covered storage.