Storage shortage: Punjab millers move shelled rice to other states

By Gurpreet Singh Nibber

A new trend has emerged in Punjab’s paddy shelling system, with rice millers transporting shelled rice to neighbouring states such as Uttar Pradesh, Himachal Pradesh and Jammu & Kashmir to hand it over to the Food Corporation of India (FCI) for the public distribution system.

Punjab has a total foodgrain storage capacity of about 180 lakh tonnes, most of which is already occupied by stocks from previous seasons, raising concerns over storage space for the current rice procurement.

Of the total capacity, around 130 lakh tonnes of rice and 50 lakh tonnes of wheat from earlier seasons are currently stored in the state, leaving virtually no space for freshly procured rice, an official familiar with the matter said.

“So there is practically no space left for rice of the current season. Storage of freshly shelled produce depends on the movement of foodgrains out of Punjab,” the official added.

Meanwhile, about 25 lakh tonnes of rice shelled since November last year during the current season is still lying at millers’ premises. Some millers have begun moving stocks to godowns in other states on their own, the official said.

According to people familiar with the matter in the state food and civil supplies department, around 10-15% of the rice milled in Punjab is being moved outside the state. Millers are also attempting to enter the Rajasthan market by supplying rice in Sri Ganganagar and Hanumangarh, the districts closest to Punjab.

The trend has picked up due to a shortage of storage space in Punjab, which has slowed the lifting of rice by the FCI. With long queues at state godowns, some millers believe supplying rice in other states allows them to avoid delays in handing over their produce.

“The fallout of this trend is that it further slows down grain movement in Punjab, while millers incur additional transportation costs,” said Tarsem Saini, president of the Rice Millers’ Association, Punjab, seeking an immediate check on the practice.

Saini said about 10% of millers are following this route, despite having to bear logistics costs themselves. Within Punjab, transportation expenses are borne by the FCI. “This practice is jeopardising the entire market,” he said, adding that Punjab has around 5,200 rice mills.

The storage crunch has persisted this season, forcing freshly shelled rice to be stored within mill premises due to inadequate space in FCI and state godowns.

This season, Punjab is expected to shell around 105 lakh tonnes of rice from the procured paddy. Production has declined due to lower yields caused by monsoon floods and estimates suggest that over 10 lakh tonnes of rice may eventually be delivered in neighbouring states.

Paddy shelling has also been slower compared to the previous season. Despite two months having passed since procurement ended in November, only 25% of the total procured paddy has been shelled so far.

“Millers are helpless. If they do not move the produce, they face heavy losses,” said Bharat Bhushan Binta, president of another rice millers association. “By supplying to other states, earnings are lower, but the risk of losses is minimal.”

Binta said the FCI accepts rice strictly as per specifications, irrespective of the state in which it is delivered. “Godowns in other states are vacant, so storage is not a problem,” he said, adding that a BJP delegation from Punjab is scheduled to meet Union Food and Public Distribution Minister Prahlad Joshi to resolve storage and procurement issues.

A senior official from the state food and civil supplies department said efforts are being made to create additional storage space. “The department does not want rice from Punjab to be offloaded to other states,” the official said.

This article has been republished from The Hindustan Times.