Rice mills in Haryana which process paddy for the Central pool (Public Distribution System / Custom Milled Rice) are faced with a double whammy, as they have been slapped with a value cut and inventory holding charges for rice.
About 800 mills in Haryana which processed 24 lakh tonnes of paddy (about eight% paddy is pending for processing) for the kharif year 2013-14 have been running from pillar to post for the past few months, trying to persuade the Central and state governments to streamline procedures on paddy milling.
State agencies purchase paddy from farmers at the minimum support price and enter into an agreement with the rice millers of the state with milling charges at the rate of Rs 15 per quintal (one quintal is 100 kg) and set the condition for the delivery of rice on a monthly ratio basis.
The monthly ratio has been set at 10% for October and November, 20% for December, 25% for January and February, and 20% for March.
Due to heavy unseasonal and sporadic rains in the 2013-14 kharif marketing season, the damage content in rice went up to four or five%, against the acceptable limit of up to three% set by the Food Corporation of India (FCI).
Paddy thus procured yielded rice which was being rejected by the FCI. This led the millers to stop milling.
Later, the Union ministry of food raised the acceptable limit and imposed a value cut on rice. Millers are burdened by the value cut for no fault of their own, said Rajender Aggarwal, president of the Haryana Rice Millers and Dealer Association.
Millers were also charged a holding charge because the delivery of rice by mills to government agencies remained suspended for three months, as a team of officials from the Union food ministry visited Haryana and prepared a report on the situation. The holding charge comes close to ~300 per day per consignment of rice, said Ashish Mehta, a miller from Haryana.
Millers say that the delay in issuing the notification for relaxation in the rice specifications was the only reason for the delay in delivery of rice, and that no such penalty should be levied on them as this delay was not their fault. Further, they added that the notification came on January 2, 2014, and so the schedule must be revised from January to June, rather than from October to June.
Millers are allowed to retain the by-products of paddy like rice husk and rice bran, which they can sell in the open market to make an extra buck. However, they claim that escalating input costs (power, labour and diesel) have squeezed margins and the income from paddy by-products is no longer significant.
The food processing industry is the backbone of agricultural states like Haryana, providing seasonal employment to labour in the hinterland and checking migration to the urban areas; any lack of support from the government may harm it, said Makkhan Lal Singla, a veteran of the industry.
