Custom milling of 93.5 lakh lakh tonnes of paddy had stopped abruptly at rice mills after two months of uninterrupted operations since June 7 due to the refusal of the Food Corporation of India to lift stocks primarily because the State government has not implemented the sixth phase of Prime Minister’s Garib Kalyan Anna Yojana scheme of free supply of rice to poor due to COVID from April.
The sixth phase was spread over April to September this year but the government drew its quota of free rice from the FCI promptly in April and May and did not supply. It began the distribution only this month with the assurance to extend the same till November to make up for the loss of initial two months. However, the Centre was not convinced not only about free rice but figures about storage of rice at mills, paddy procurement audit and failure of mills to cooperate with physical verification of stocks by the FCI.
As a result of suspension of milling for the last eighteen days, the paddy stocks at mills were exposed to damage due to rain and sprouting of weeds from within gunny sacks.
There was no response from Centre to repeated pleas of State government to resume the procurement of custom milled rice as it had committed to extend the distribution of free rice under PMGKAY by two months. A recent enquiry from the Centre whether the distribution had indeed started this month had given a glimmer of hope to the State of positive tidings. In this backdrop, the government had decided to wait till Tuesday before taking further action.
In the event of continued reluctance of Centre to buy rice from the State, the government was said to have considered a few alternatives like e-tendering by letting millers buy the stocks at their own mills at reduced prices to compensate for damage. If so, what should be the basic price?. The government was reportedly considering a selling price of ₹1,700 to 1,750 per quintal though it procured at the minimum support price of ₹1.960 a quintal which went up to ₹ 2,200 a quintal factoring in transportation, cost of gunny sacks and commissions.
The government had procured 50.12 lakh tonnes of paddy in rabi of 2021-22 which was yet to be milled and awaiting custom milling of pending 38 lakh tonnes pertaining to kharif of the same year and 5.5 lakh tonnes of rabi in 2020-21. With a yield of 67 kg of rice per quintal of paddy, the FCI was supposed to lift 33.58 lakh tonnes for rabi of 2021-22 alone and 62.2 lakh tonnes of rice on the whole for three seasons. The value of the stocks was worth about ₹19,904 crore.
On the other hand, the government had taken a loan of ₹22,000 crore to procure paddy in kharif and rabi of 2021-22 at an interest of ₹110 crore per month. Therefore, it was felt the FCI’s purchase of stocks to the tune of ₹19,904 crore would bail out the State government to a large extent. But, the Centre had given no indication of this. Ministers T. Harish Rao and G. Kamalakar and Chief Secretary Somesh Kumar discussed the issue elaborately on Friday and decided to wait for the next move till a final word from the Chief Minister next week.
