Rice millers in Telangana fleece paddy farmers as government backs out
HYDERABAD: Amidst acrimonious political battle over paddy, rice millers in Telangana are entering into pre-crop agreements with farmers for purchasing the produce for a price much below the minimum support price (MSP). Farmers too prefer it because it is not possible for them to switch over to alternate crops all of a sudden during rabi.
While the state government is procuring paddy for an MSP of Rs1,940 per quintal, the millers are convincing farmers to settle for Rs 1,500 saying that it is the net amount they are getting at present from the government as they are incurring an expenditure of Rs 400 per quintal towards transportation charges from fields to procurement centres and again from procurement centres to rice mills.
Although the state government has to bear transportation expenses from procurement centres to rice mills, it is an open secret that farmers are forced to bear some part of the transportation charges as the lorry owners and drivers refuse to load stocks unless they are paid, citing the government's delay in clearance of transport bills. The state government still owes the transport bills of last year. Apart from that, farmers have to incur expenditure toward hamali charges and commissions during loading and unloading of stocks. With no facilities in government market yards, farmers have to make all arrangements on their own. For instance, farmers transported their paddy stocks to government market yards in October and the government is yet to procure the majority of the stocks. The recent rains damaged paddy stocks to a huge extent causing severe financial losses to farmers. They continue to wait in market yards to sell their produce even after two months. Millers are convincing farmers that they could avoid all these expenses and troubles as they procure stocks directly from them. Millers tell farmers that they can still make profits even at the price of Rs 1,500 per quintal.
After Chief Minister K. Chandrashekar Rao made an announcement on November 29 that the state government would not set up paddy procurement centres in rabi citing the Centre's refusal to procure rabi rice from Telangana, the rice millers in the state have sprung into action. They are holding village-level meetings asking farmers to sow paddy
and entering into purchase agreements.
There are a total of 2,500 rice mills in Telangana, of which 1,500 are parboiled rice mills and 1,000 raw rice mills. If farmers stop paddy cultivation, these 1,500 rice mills will plunge into crisis and face closures. Majority of the mills are located in undivided Nalgonda, Karimnagar and Warangal districts.
"Each parboiled rice mill has been set up with an investment of nearly Rs 10 crore. Of these, more than half of the parboiled rice mills were set up in the last three years alone due to steep increase in paddy production in Telangana. The owners of these rice mills are exploring all the options to save their mills from closure. As per the agreements, rice millers will directly procure stocks from fields and pay cash to farmers on the spot. There is no risk of paddy getting damaged in market yards due to rains," T. Devender Reddy, president, Federation of South India Rice Millers’Association, told this newspaper.
Farmers associations accuse the state government of encouraging rice mills to loot farmers by deciding not to procure paddy in rabi.
"The state government failed to give a clarity whether farmers should sow paddy or not in rabi even though we are in rabi season. The government is now asking farmers not to sow paddy. But the time is not sufficient to switch over to alternate crops at this stage. The government should inform at least six months in advance about any changes in crop pattern. Farmers have no option but to sow paddy in rabi and sell to rice millers. This will only benefit rice millers and not farmers," said T. Sagar, general secretary, Telangana Rythu Sangham.
