Recovering CMR From Defaulting Millers Remains a Big Challenge

Hyderabad: Rice millers failing to deliver the agreed quantities of processed rice after receiving paddy for milling — also called the accumulated Custom Milling Rice (CMR) defaults — pose a challenge for the state’s civil supplies department.

Since the 2014-15 Kharif Marketing Season (KMS), recovery from defaulters has been less than 50 per cent of the officially valued Rs 2,639 crore. Procurement policy guidelines for KMS 2025-26 are expected soon to address this deep-rooted issue.

"Custom Milling Rice (CMR) defaults" refer to rice millers failing to deliver processed rice to the government as per their agreement, often after receiving paddy for milling. These defaults have resulted in significant financial losses for governments, leading to severe actions against millers, including registration of cases, imposition of penalties, and seizure of property. Some millers have also diverted the paddy to private markets instead of fulfilling their government commitment.

According to official sources, while the present government has managed to bring the situation under control through stringent measures, recovering long-pending CMR from millers remains a complex task, despite tough actions taken over the past two years.

“We have implemented strict measures, including allocating paddy to rice mills based on milling capacity. Millers were informed that future allotments would depend on their performance. They are expected to maintain adequate storage to accommodate any surplus paddy beyond their milling capacity,” officials said.

Data from the civil supplies department shows that 1,868 mills defaulted between KMS 2014-15 and KMS 2023-24, accounting for over 13 per cent of total CMR, worth about Rs 35,000 crore. Of this, about six per cent (Rs 2,017 crore) has been recovered, while over seven per cent remains pending.

A Cabinet Sub-committee on Paddy Procurement, chaired by Minister Uttam Kumar Reddy, is expected to propose a foolproof policy for CMR recovery and penalties for defaulting millers. An official noted, “We are doing our best and have recovered the maximum possible through stringent measures. Currently, the matter is with the Cabinet sub-committee.”

The operational guidelines for paddy procurement and CMR delivery, adopted during KMS 2024-25, had faced strong opposition from millers last year. The rules stipulate that millers must provide a bank guarantee based on their default history — 10 per cent for millers with no previous defaults, 20 per cent for those who defaulted but paid with penalty, and 25 per cent for millers who defaulted without paying the penalty.