PADDY MILLING POLICY: Rice millers reluctant to store paddy

Ferozepur, November 2, 2012: During the current Kharif season, the target for paddy procurement in Ferozepur District is 8.28 lakh MTs against which, as on date,  6.99 lakh MTs have already been purchased by all the six procuring agencies – Markfed 1,80,712 MTs, Punsup 1,71,305 MTs, Pungrain 1,195,851 MTs, Warehouse 67,621 MTs, Punjab Agro 59,657 MTs and FCI 24,019 MTs.

Against the paddy procurement target of 8.28 lakh MTs, the total paddy milling capacity required is 276 MTs whereas according to food and supplies department, 302 MTs milling capacity have already been allotted to all the agencies and 5.58 lakh MTs paddy stocks have already been stored.  For the remaining stocks, which are still lying in the mandis, the lifting is slow, because of the three reasons; first blacklisting of rice mills due to non-milling of paddy of the previous years or some criminal cases under process thus reducing the milling capacity in the district, second, as per the paddy milling policy, the eligible mills who have delivered 70 per cent and above but less than 100 per cent custom milled rice(CMR) of Kharif Marketing Season(KMS) shall be allotted paddy in KMS 2012-13 with certain norms, such as, if the milling of the previous year is between 70 per cent to 90 per cent, the paddy will be stored to the extent of 70 per cent of he norms for KMS 2012-13 and so on, for 80 to 90 per cent, 80 per cent of the norms and 90 to 99 per cent, 90 per cent of the norms for KMS 2012-13, third; the reluctance of rice mill owners with one or the reasons beset known to them.

In view of the above policy, all the agencies are in a fix as to where to make arrangements for about 21 per cent paddy stocks lying in the mandis.

As per the sources, in case the custom milling capacity in the district is under utilised by all the rice mills, the paddy has to be shifted to the adjoining districts or where the extra milling capacity is available and rice mill owners are ready to accept the stocks.  But this is going to put an extra burden on the government on account of heavy transportation charges. 

While talking to agencies officials, the only alternative to save the stocks from any natural calamity while stacked in the mandis due to non-acceptance by the local millers, is to shift the stocks to distance places where milling capacity is available. The other alternative is to store the paddy in own custody and later on, issued to the rice mill against delivery of advance rice in the agency’s account to the Food Corporation of India .  But this has lot of complications as none of the agency is having the storage capacity to store the paddy stocks besides loss of weight which would not be acceptable to the rice millers when lifted against the advance deliver of rice.

On contacting, N.C.Rana, a retired regional manager, Warehousing Corporation was of the view that paddy milling policy should be reviewed by increasing the storage of paddy in the rice mill premises of per ton capacity which is presently 3000 MTs for one ton milling capacity, 5000 MTs for 2 MTs, 7000 MTs for 3 MTs, 9000 MTs for 4 MTs, 11000 MTs for 5 MTs, 13000 MTs for 6 MTs and 15,000 MTs for 7 MTs milling capacity besides extending the scheduled time for delivery of rice initially up to 30 June.

When few rice mill owners were contacted, they said, the paddy stocks are being accepted to a limited quantity than the milling capacity in view of the strict milling policy.  As per the policy, the entire milling has to be completed by 31^st March and in case of any circumstances beyond control like power failure, labour problem or non-availability of space with the FCI, it would be possible to adhere to the time schedule for the delivery of custom milled rice of 10, 25, 25 20 and 20 per cent during the months from November to March, 2012.  The paddy milling for the current year needs to be reviewed, they added.

The most dangerous clause in custom milling policy 2012-13 is 18(d), according to which in case any rice miller who delivers the rice after the stipulated date of 31^st March, shall be charged interest at the RBI’s Food credit rate i.e. 13 per cent at present with effect from Ist April, 2013, till the date of delivery.  Not only this, if the miller fails to complete his milling even by the extended date allowed by the Govt. of India, he shall be required to pay the acquisition cost of paddy (MSP plus taxes, cost of bag and transportation) and interest @ 13 per cent to be charged from Ist December, 2012 till the time he clears the dues.  But he will not be paid any milling charges for the undelivered stocks.

Rahul Chandan, district manager, FCI, when contacted on phone said, FCI will accept the rice from the rice millers on behalf of the allotted agencies if it is within the prescribed specifications and would ensure availability of sufficient space by simultaneously arranging movement of rice to other states.