SP leader Ram Gopal Yadav said any such step will render lakhs of farmers unemployed and will adversely impact the rice sold through the Public Distribution System (PDS).
"If it is implemented, it will be unfortunate as there will be no one to buy rice after that," Yadav told reporters after meeting the Prime Minister here.
Maintaining that 80 per cent of rice is procured from UP and AP, he said there were fears that rice production could go down by 10 per cent due to poor monsoon.
"How will you meet the rice requirement for PDS system if the proposal is implemented," he asked.
Noting that the Prime Minister was unaware of the proposal, Yadav, however, said that Singh has promised to ensure that "farmers interest are not harmed".
Yadav said the fallout of any such move could "force farmers sell rice at a petty price while hoarders will be able to charge at their will."
He also said people who are engaged in over 10,000 rice mills in UP every year will be rendered jobless.