The Centre has rolled out a pilot project aimed at reducing broken grain share in the rice stock managed by the Food Corporation of India (FCI) to 10 per cent from current up to 25 per cent, which will improve the quality of rice distributed through ration shops. The plan, if successful, will also reduce leakage in the public distribution system, increase the availability of rice for ethanol production and reduce storage costs.
Under the plan, after segregating 15 per cent broken type, it would be sold to distilleries for ethanol directly from rice mills. The government has allocated 24 lakh tonnes (lt) of rice from FCI for ethanol until October 31, 2025.
“When FCI rice in current form (with up to 25 per cent broken mixed) is supplied at ₹22.50/kg, there remains a possibility of diversion of it to market by sourcing 100 per cent broken rice from mills at lower cost. Once 100 per cent broken rice will be supplied from FCI, distilleries won’t be able to make any change,” said a source. Besides, the current rates of broken rice is also likely to rise as export has also been opened now, the source added.
According to the pilot launched last month, FCI asked some mills in Punjab, Haryana, Telangana and Andhra Pradesh to segregate the 15 per cent broken rice separately from 10,000 tonnes of paddy to be processed under the custom milled rice (CMR), in each state. Those 15 per cent share of broken rice will be directly sold to distilleries from mills.
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Explaining the plan, sources said that out of 67 kg of rice processed from 100 kg of paddy, the broken grain share share is up to 25kg, which will now be reduced to 10 kg as 15 kg of broken will be segregated from it separately. “As FCI has 458.75 lt of paddy stock as of March 1, if the segregation is made at mill gate, FCI will get delivery of 238 lt of rice, which will have 10 per cent broken rice and another 69 lt of broken rice may be sold from the mill to distilleries,” he said.
The storage cost incurred by FCI is ₹6.83/quintal when kept in its own warehouses, but surges to as high as ₹12/quintal when kept in hired godowns owned by private sector. The cost of warehouses owned by public sector companies are also higher than ₹10/quintal.
As the government has been mulling how to dispose off high stock of rice amid increased procurement, the new norm on broken share implemented across the country will reduce the rice stock by 15 per cent, or a saving of about 90 lt per year assuming that 600 lt of stock is handled by FCI annually.
Besides, there has been also concern in the past about maize prices from the poultry sector when production falls and they ask for priority over ethanol distilleries. The alternate grain (broken rice) from FCI will help address the concerns of the poultry sector as well, sources said.
