Telangana’s bank guarantee requirement for rice millers hinders paddy procurement

Farmers bringing their produce to purchasing centers are encountering difficulties, with many forced to sell to rice millers at distress prices due to concerns about impending rains. On October 30, the state government issued GO 27, requiring rice millers to provide a bank guarantee to procure paddy for custom milled rice. Additionally, the charges for custom milled rice (CMR) have been raised. According to the order, millers without any pending CMR must provide a 10 percent bank guarantee or a 25 percent security deposit.

Karimnagar: The State government’s decision to insist on bank guarantee from rice millers has become a hurdle for paddy procurement.

Farmers, who brought their produce to purchasing centers, are facing troubles in centers. Worried about rains, ryots are being forced for distress sale to rice millers. On October 30, the State government issued GO 27 asking rice millers to give bank guarantee to get paddy for custom milled rice. Charges of CMR have also been increased. According to the order, millers, who have no pending CMR, have to give 10 percent bank guarantee or 25 percent security deposit. Millers, who returned CMR with penalty, have to give 20 percent bank guarantee or 25 security guarantee. A 25 percent bank guarantee has been fixed for millers, who had not paid penalty after returning CMR.

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Millers, who are opposing the new GO, are not ready to give bank guarantee. Millers from Rajanna-Sircilla and Jagtial districts also wrote letters to the respective district collectors opposing the GO. Meanwhile, the State government was not allocating paddy to millers, who have not given bank guarantee. As a result, the paddy is piling up in purchasing centers.

While Rs 2230 minimum support price was fixed for Grade-A paddy, it was Rs 2200 for the normal variety. The Congress government had also announced to give Rs 500 bonus to fine variety paddy, as a result of which many farmers sowed fine variety paddy in this season.

1330 procurement centers were established across the old district. On the other hand, the farmers, who sowed paddy in the beginning of the present Vanakalam season, have started harvesting and shifting the crop to PPCs. Though the setting up of centers has started after Dasara festival, the procurement process has not picked up momentum so far. Farmers, who hoped for procurement after the Diwali festival, were disappointed.

However, they are facing troubles in centers. Rain is the most worrying factor for farmers since a spell of drizzling has been recorded in the district every day.

Scared of rains, farmers are forced to sell distress sales to traders at lower prices. A quintal paddy is being sold in between Rs 1850 to Rs 2000 depending on the moisture percentage.