Defaulting rice mills owe Rs 2,500-crore rice to govt

About 800 rice shelling mills, which were blacklisted last month, owe rice worth about Rs 2,500 crore to the Punjab government. The mills were blacklisted as they failed to clear the backlog of rice supply from paddy of the 2011 kharif season.

Meanwhile, the state government has sought time till December 31 from the union food ministry to supply rice for the public distribution system. Earlier, the deadline was November 30. The blacklisted mills have also been told to do the needful in the stipulated time.

The government has already told the defaulting rice shelling mills to clear the previous rice stocks of at least 70%. As per norms, 67-68% rice is milled from a given weight of paddy.

Satwant Singh Johl, director, department of food and civil supplies, said 20 lakh tonnes of paddy were supplied to these 800-odd rice mills in the previous season. These mills were supposed to give back around 13 lakh tonnes of rice to state government agencies, which would further pass it on to the Food Corporation of India.

State government agencies have procured 120 lakh tonnes of paddy in the current season; the total is expected to reach 125 lakh tonnes. According to an official of the state food and civil supplies department, the state government had no option but to crack the whip on the defaulting mills.

"The state government procures paddy on behalf of the Centre. The state is reimbursed expenditure made on the procurement only after rice is delivered to the FCI," an official said, adding that Punjab took food credit limit from the Reserve Bank of India for procurement of foodgrains at an annual interest rate of 13%.

Reportedly, the rice mills, especially the defaulters, can't clear the entire backlog as the no longer have the stocks. "We have given an option to rice millers to pay cash in lieu of the paddy supplied to them in case they are not able to give back the rice," said another official of the department. For the previous season's paddy, the government has fixed a rate of Rs 1,110 per quintal. The government would also impose an interest rate of 13%.