Telangana: New guidelines on CMR allotments spark strong opposition from millers

The millers have made it clear that they are not prepared to provide bank guarantees, with some even threatening to boycott the operations entirely if the policy is enforced.

Hyderabad: The State government is set to introduce new guidelines for the allotment of paddy for custom milled rice (CMR) operations, which have sparked opposition from rice millers. The proposed policy mandates that millers provide bank guarantees for the allotment of paddy, a move, as the millers organisations claim, primarily driven by Civil Supplies Minister N. Uttam Kumar Reddy.

During recent preparatory meetings for the Vanakalam (Kharif) minimum support price (MSP) operations, millers’ associations voiced their objections to the State Civil Supplies Corporation (TGCSC) officials. The millers have made it clear that they are not prepared to provide bank guarantees, with some even threatening to boycott the operations entirely if the policy is enforced. The government aims to require bank guarantees for at least 25 percent of the value of the paddy allotments. This change is intended to ensure accountability and timely delivery of CMR, as there have been increasing instances of millers failing to deliver the custom milled rice within the stipulated time, causing delays and financial losses to the government.

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Millers argue that the new requirement adds financial strain and complicates the milling process, potentially leading to delays and increased costs. They also point out that the millers in the State currently hold substantial paddy stocks, including 28 lakh tonnes from the Rabi 2022-23 marketing season and 33 lakh tonnes from previous Kharif and Rabi seasons, questioning the need for fresh paddy allotments under the new guidelines. These stocks with them support CMR operations for the next six to eight months.

The TGCSC has assured millers that their concerns will be addressed in a high-level meeting soon. However, the government remains firm on the bank guarantee requirement, citing the need for risk mitigation and financial security. The bank guarantee is seen as a measure to prevent defaults and ensure that millers comply with the terms of the agreement, delivering the processed rice to the Food Corporation of India (FCI) or the state government as required.

The ongoing discussions and potential adjustments to the policy seems to be imperative and indicate a need for further dialogue between the government and millers to find a mutually acceptable solution. The outcome of these negotiations will be crucial for the smooth implementation of the new guidelines and the overall success of the CMR operations in Telangana, felt representatives from both sides.