25% Penalty to Be Levied on Rice Millers in Case of Default Rice Market Roils: Surge in Indian Parboiled Rice Prices Amidst Global Shifts

25% Penalty to Be Levied on Rice Millers in Case of Default

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State has to fulfill its obligations otherwise they will have to pay penalty

State Govt. of Telangana has asked the Centre to allow more time to deliver rice to the Food Corporation of India (FCI) from the 2021-22 kharif season. But the Centre has refused the proposal of additional time and apart from this they have also levied a 25% penalty on rice millers in case of non-fulfillment of the obligation of delivery. The deadline to supply rice ended on 31st March. There were approx.  0.22 Million Tonnes of paddy left un-milled, in around 500 mills. 

A senior Government official said that “They have to pay a 25% penalty on the value of the rice that is not delivered to the FCI. They have to pay an additional 12% penalty to be eligible to supply paddy in the 2022-23 marketing season.

“Despite several requests from the State Government, the Centre refused to give any further extension of time beyond March 31,” he said.

Remaining stock to be taken by State for PDS

The leftover stock will be taken by the State government and they will use them for the public distribution system. It, however, put a clause. It asked the millers to pay at least a fifth of the penalty to get eligibility to hand over the stocks. 

The official also said that “Subsequently millers should clear the remaining penalty in four equal installments along with interest and complete the delivery of rice from the leftover paddy stocks.”

Millers have to rush the process to avoid trouble

Based on the Central procurement requirements, the State Government assigns quotas for procuring paddy to different mills every year. The millers process the paddy and supply rice to the FCI on behalf of the State Government. 

Fresh stock of paddy is about to come. The Centre asked the millers to accelerate the process. The fresh paddy stocks from the 2022-23 rabi season are expected to arrive and still the kharif season paddy is remaining. 

A miller from Karimnagar told “Business Line” that – “About two-three lakh tonnes of paddy from the rabi 2021-22 season is still lying with several mills”. The millers are in for bigger trouble as the deadline for delivery of the rabi 2021-22 season ends on May 31.

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