Hyderabad: The Centre’s decision to scrap levy rice system besides increased operational costs has pushed the rice milling industry into a deep crisis.
The crisis affected the livelihood of thousands of people in towns and villages in districts with no salaries being paid for the last few months.
Hundreds of mills have been either closed down or are on the verge of closure in Nalgonda and Karimnagar districts, which have the highest number of these mills.
Though the closure of rice mills may not have a direct impact on consumers as of now due to enough stocks, the impact can be adverse from January 2016 onwards, when stocks deplete.
Rice millers are seeking a special package and other tax incentives from the Ts government to save the industry from collapse.
There are about 2,500 rice mills in Telangana state, of which only 200 are operational at present and the rest have become non-functional. While about 1,200 mills have been put up for sale, some 600 were closed down and another 500 are on the verge of closure.
“Rice mills started suffering huge losses after the Centre decreased levy rice quota from 75 to 25 per cent last year. This year, it has withdrawn even the 25 per cent quota. Under levy system, the FCI used to procure rice from the mills for PDS across the country. Now, the state governments were asked to procure rice directly from millers for PDS through custom milling. With this, the demand for rice has come down and millers are forced to sell stocks in the open market, where there is not much demand,” said G. Narendra, president, TS Rice Millers Association.
