Govt to revoke licences of 2,000 millers over failure in supplying rice

Defiant rice millers

• 2,000 mills avoided signing deals of supplying rice to govt
• 181 mills breached contracts
• Govt to revoke licences of the millers, cut off power connections
• Total mills in contracts during last Boro season: 17,000

The government will revoke the licences of 2,181 millers who either breached a contract of supplying rice or avoided signing it during the last Boro season – despite a hike in rice procurement prices.

It will also cut off power connections to their rice mills, according to recent directives from the food ministry.

The food directorate will send a list of such millers to the Power Division for their electricity connections to be snapped so that they cannot operate.

Besides, the security deposits of millers who did not supply rice to the government despite signing a deal will be forfeited.

There are 19,000 automatic and husking rice mills in the country. Of them, 17,000 signed contracts to supply paddy to the government during the last Boro season, while the rest stayed away, according to the food directorate.

The number of mills that breached contracts is 181, including three automatic ones, it added. 

Millers who supplied 80% of their agreed quantity will not face any punishment and will get their security deposits back, while those who failed to supply less than 80% of rice will have their security deposits confiscated in proportion to the supply, according to the directives.

When contacted, Food Secretary Mosammat Najmanara Khanum told The Business Standard, "We repeatedly asked millers to supply rice as per the agreement. Now, we are going to take action against those who did not comply."

According to the food ministry, in 2020 millers supplied only 56% of the contract quantity on the pretext of high paddy prices. They had demanded a rise in rice procurement prices, but the government did not agree.

However, in the last Boro season, the government reset the paddy procurement price at Tk27 per kg with a Tk1 rise and parboiled rice at Tk40 per kg with a Tk3 rise.

Even then, at the beginning of the procurement drive, the millers were dilly-dallying in supplying rice, resulting in a plummeting of the government's rice stock owing to a low collection. Cashing in on it, rice traders hiked rice prices by creating an artificial crisis.

Against this backdrop, the government had decided to import 17 lakh tonnes.

Najmanara Khanum said rice traders raised rice prices, citing a crisis even during the Boro harvesting season. In reality, they hoarded rice. 

When the government permitted rice imports by slashing duty to cool soaring prices, they released rice instead of going for imports. As a result, rice prices dropped a bit, she added.

Millers are obliged by law to supply rice to government warehouses, but they have not done so for a long time. They will no longer get away with it, according to the food ministry.

When contacted,  KM Layek Ali, secretary general of the Bangladesh Auto Major and Husking Mill Owners Association, told TBS, "The food ministry has suddenly made it compulsory for us to supply rice to the government without even consulting us, which is putting a lot of pressure on us. It is necessary to consider our capabilities too."

In the last Boro season, the government had a target of procuring 10 lakh tonnes of parboiled rice and 1 lakh tonnes of sun-dried rice. After having extended the procurement drive by 15 days, about 10.60 lakh tonnes of Boro parboiled rice and 85,503 tonnes of sun-dried rice were procured. The paddy collection was 3.62 lakh tonnes against the target of 6.5 lakh tonnes.

Many millers supplied no rice despite being under a contract with the government.

The food ministry was initially under pressure because of poor procurement. That is why it went for imports and increased its stocks. At present, the government has 13 lakh tonnes of rice and 2.25 lakh tonnes of wheat in its stock.

In the last Boro season, over 2 crore tonnes of paddy were produced across the country.