FCI not taking delivery of levy rice: UP mill owners

Even as paddy procurement is gaining momentum in Uttar Pradesh, the rice millers are complaining that the Food Corporation of India (FCI) is not taking delivery of levy rice.

The millers claim about 25,000 tonnes of the food grain has got stocked with the millers and a payment of Rs 500 crore to farmers is also pending, affecting 150-odd rice mills.

While the state continues to collect common-grade levy rice from millers, FCI is yet to act, UP Rice Millers Association President Sanjeev Agrawal told Business Standard.

The association has already made a representation to the state government in this regard.

Under levy rice, millers have to give 75 per cent of the food grain to the FCI and state agencies, and this quantity varies from state to state.

“Besides, the FCI is insisting on making the levy rice payment directly to farmers, while we are already purchasing paddy on cash payment,” Agrawal said.

Mehboob Hasan Khan, UP food and civil supplies chief marketing officer, said the government agencies were not transacting with millers, which had pending levy rice backlog, pertaining to 2006-07 and 2007-08.

“The levy rice collection will pick up in days to come,” he said. There are 6,000 odd rice mills in UP, of which about 1,000 operate in the organised sector.

Meanwhile, 12 lakh tonnes paddy has been procured against a target of 26 lakh tonnes for 2008-09 kharif season. The procurement, which took off from October 1, will continue through February 2009.

The government has engaged agents (arhtia) to boost paddy procurement like last year and is giving a commission of 1.5 per cent on the minimum support price (MSP) of Rs 900 per quintal (including a bonus MSP of Rs 50).

The state government is simultaneously undertaking custom milling of paddy and the figure has touched 4 lakh tonnes so far. Under custom milling, millers are given paddy by the government for processing it to rice.

An estimated 60 lakh hectares is under paddy crop this season, and the production is estimated at 130 lakh tonnes, against last year’s figure of 117 lakh tonnes.