Harvesting in progress at one of the paddy polders in northern Kuttanad. The delay in receiving the dues for the paddy procured by the Modern Rice Mill at Vechoor has affected farming preparations in at least five panchayats of the region.

Even as the State government looks to expand its presence in the segment of food processing by establishing rice mills, its flagship project in the sector from Northern Kuttanad appears to be going off the track slowly.

The Modern Rice Mill at Vechoor, a wholly-owned subsidiary of the Oil Palm India Limited (OPIL), is now staring at a major crisis in the face of a mounting dues from the Supplyco as well as the State government. Faced with an acute shortage of funds, the mill has failed to pay up its dues to the paddy farmers, who have been up in arms against the public sector initiative.

As per estimates, the mill is due to pay at least ₹5 crore to the paddy farming collectives in at least five panchayats of Northern Kuttanad region. In the previous season, the mill procured the crop directly from farmers at rate of ₹28.35 per kg and guaranteed to clear their dues within 40 days.

But with no funds forthcoming, the agency has wound up the process for the time being, putting the farmers in a quandary. The irate farming collectives are also accusing the company of slowing down deliberately to help the private mill owners.

“”The payment from the Supplyco, which now comes around ₹5 crore, has been due since May this year. We are also due to receive ₹9 crore as the State Incentive Bonus, which seeks to off set the difference between the procurement price set by the government and the actual market price,’’ said an official.

Adding to its woes, the mill has received another order from the Supplyco to deliver 450 tonnes of its rice to its stores all across the State. The order, according to the mill management, is expected to deepen their financial burden as the latest order stipulates no provisions to meet the cost of transportation.

The mill’s operation becomes untenable if the losses continue to mount and in the long run, there will be no other option for the OPIL but to wind up the project, warned the official.

The Modern Rice Mill was launched in February 2011 with a stated objective of liberating the paddy farmers in the region from being at the mercy of private millers. During the first phase, the mills had a capacity of processing 12,000 tonnes of paddy annually, which was supposed to increase to 30,000 tonnes in the second phase. However, a decade after, its capacity has decreased to 6,000-7,000 tonnes per annum following lack of proper maintenance of the machinery and non-availability of sufficient warehouse facilities. Presently, the mill has a capacity to store only 5,000 tonnes, which affected its processing capacity.

Published Date: December 4, 2023