The Hindu : Andhra Pradesh News : Rice milling industry in doldrums

Online edition of India's National Newspaper
Saturday, Sep 11, 2004

Andhra Pradesh

Andhra Pradesh

Rice milling industry in doldrums

By Our Staff Reporter

KHAMMAM, SEPT. 10. The rice milling industry is heading towards a disaster in the district. A majority of the rice mills have already been closed while a few more are on the verge of downing their shutter.

The hard times owed much to the agrarian crisis as well as the policies that deprived the industry of minimum support. The fortune of some parboiled mills, which were known for their big business, is beyond revival. Hardly one third of the 200 raw rice units and 12 out of 32 parboiled units are in operation in the district.

With the big parboiled mills turning sick, about 3,000 people were deprived of work while the closure of raw rice mills affected an equal number of hamalis.

At the receiving end

Millers found themselves at the receiving end mainly because of the fall in demand for the boiled rice outside the State. Rice production was up in Tamil Nadu, Kerala, West Bengal and Orissa and it affected the market mainly for boiled rice. The production of finer varieties of raw rice was also affected in the district because of the non-supply or delayed supply of water to the command area of Nagarjunasagar left canal.

The export market was also considerably affected because of increasing competition from rice

exporting countries such as China and Pakistan. Countries such as Bangladesh, Singapore and Thailand, which had been the traditional market for rice exporters, began to look for cheaper varieties.

As a local miller put it, Chinese had been supplying rice at $ 120 a tonne as against $ 160 to 170 by Indian exporters. Exports from the district would have helped in making up for other losses in milling, he noted.

Dip in profit margin

The Food Corporation of India has been taking only 50 per cent of the rice production as levy and millers are left with the rest for sale in the open market. Their supplies have been restricted more or less to the local market where the profit margins had come down considerably.

The millers have been looking towards the Government for relief on certain counts. A major burden has been the collection of market cess -- both on paddy as well as rice. The Khammam Rice Millers Association president, Vempati Lakshmi Narayana, said the collection of market cess on paddy and rice amounted to double taxation.

In addition to this some of the parboiled mills had to pay Rs. 35,000 for each billing period to retain power supply despite their closure because of the stipulation under LT 3b category. It is mandatory on their part to pay for a minimum of 5,000 units along with other charges, irrespective of the status of the operation of the mills.

The rice mills have also been denied of the status of agro-industry and thereby subsidies as well. "When dal mills can be treated as agro units, why not rice mills," questioned the association general secretary, B. Lakshminarayana.

The rice mills could be revived by unveiling a special package, association leaders said.

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