Fate of Telangana parboiled mills hangs in balance

With the curtains down on procurement of parboiled rice by the Centre, nearly 1,000 mills that process parboiled rice in Telangana risk losing the money they invested for the special machinery to mill the rice grown during the rabi season. Out of the 3,000 rice mills in the State, these 1,000 mills are specially equipped to handle the parboiled paddy, which needs to be steamed before milling.

The parboiled mill network, which evolved over a period of 40 years, now faces a dead-end, leaving scores of millers with huge losses. “As against an investment of ₹2-3 crore to set up a factory to mill white rice, we spent ₹5-10 crore to set up a parboiled rice mill. Now, they are saying there will be no purchase of parboiled rice. All our investments will go waste,” a miller from Nalgonda district, requesting anonymity, told BusinessLine.

White (raw) rice mills cannot produce parboiled rice, but parboiled rice mills can handle raw rice milling. “About 90 per cent of the parboiled rice mills can mill white rice,” Satyanarayana, a leader of the Telangana Rice Millers’ Association, said.

Though technically it is possible for them to mill white rice, it is not financially viable, says Balayya, another officer-bearer. “The paddy grown in rabi season in some districts gives not more than 10 per cent of rice, with the rest turning out to broken rice. It is not at all viable,” he said.

The high yielding variety crop is exposed to very high temperatures in March and April. So, the grain turns brittle and leads to a higher percentage of broken rice during the milling price. In order to reduce the damage, millers boil the paddy. The processed rice, however, have limited takers.

Since the FCI godowns are saddled with stocks of parboiled rice that can meet the country’s demand for 3-4 years, the Union Government has said it will not be in a position to buy rabi parboiled rice. However, it said it would procure white rice. After putting up a brave front for a few months, the Telangana Government has agreed to supply only white rice as it does during the kharif season.

Conversion compensation

As it agreed to toe the Union Government’s line on rabi procurement, the State government set up a committee to identify the issues involved and suggest measures. The key issue here is the quantum of compensation that the millers seek for the increased component of broken rice.

“We expect a compensation of ₹300 a quintal for the losses that we will incur due to the higher percentage of broken rice,” Satyanarayana said. The percentage of broken rice varies from region to region in the State. While the paddy produced in the rabi season in Nizamabad and Nalgonda districts is better off in terms of conversion, the paddy grown in other parts of the State is prone to breaking.

Sources in the industry said the millers would have to lose absorb the losses and take up white rice milling.

What traders want

Traders see a solution for this problem. What they want is a ₹300 a quintal bonus for the farmers and give the millers or traders paddy at ₹1,600 quintal. “At that rate, it will be viable for us to tap the huge export market. We can’t buy it at the MSP price and do the exports,” a trader said.

Broken rice is in demand in China and Vietnam as feed and for manufacturing wine. In India, too, broken rice is in demand for its use as poultry feed.

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