Double trouble for Haryana paddy processing mills

Rice mills in Haryana, which process paddy for the central pool (Public Distribution System and Custom Milled Rice), are in a Catch-22 as they have to pay a value cut and holding charges.

Around 800 mills in Haryana, which process 2.4 million tonnes of paddy - about 8 per cent paddy is pending for processing - for the year 2013-14, have failed to draw attention of the Centre and the state government in streamlining the process of paddy milling.

State agencies purchase paddy from farmers at a minimum support price and enter into an agreement with rice millers in the state with milling charges at Rs 15 a quintal and set the condition for the delivery of rice on a monthly ratio basis, such as in October and November 10 per cent, December 20 per cent, January 25 per cent, February 25 per cent and March 20 per cent. The damage to the rice crops went up by four to five per cent against the acceptable limits of up to three per cent by Food Corporation of India (FCI), owing to heavy unseasonal and sporadic rains in Kharif season last year.

The poor quality of rice produced, was rejected by the FCI. This persuaded the millers to stop milling. Later, the Ministry of Food imposed a value cut on the rice. Millers were burdened by the value cut said Rajender Aggarwal, President Haryana Rice Millers and Dealer Association. He added that millers are also being charged for holding charges (the delivery of rice by mills to the government agencies was suspended for three months as officials from Food Ministry visited Haryana and prepared a report on the actual situation).

This (holding charges) comes close to Rs 300 per day per consignment of rice, said Ashish Mehta, a miller from Haryana.

Delay in issuance of notification for the relaxation in specifications of rice was the only reason for the delay in delivery of rice and any such penalty should not be levied on them as they have no fault of theirs in this case. Further they added that the notification came on January 2. So the schedule should have been revised from January to June rather than for October to June.

Although millers are allowed to retain the by-products of paddy like rice husk and rice bran, they contend the escalating input costs (power, labour and diesel) have squeezed the margins and income from paddy by-products does not provide a significant increase in income.

The food processing industry is the back bone of agriculture in states like Haryana. The non-cooperation of government may scuttle the industry that provides seasonal employment to labour in hinterland and checks migration in urban areas, said Makkahn Lal Singla, a veteran in the industry.