State stands to lose crores over substandard rice stock

The government’s delay in distribution of 68,000 tonnes of substandard rice under the flagship Anna Bhagya scheme may result in a loss of Rs 169 crore to the state exchequer, say official sources.

The State Food and Civil Supplies Department procured a total of 1.61 lakh tonnes of rice from millers between November 2013 and February 2014. This was meant for sale at a subsidised price of Re 1 per kilo under the Anna Bhagya scheme.  Of this, 93,000 tonnes were released for families below the poverty line. The remaining stock was held back as it was found to be substandard.

The rice is stocked in godowns of State and central warehousing corporations in Davangere, Koppal, Raichur, Tumkur, Shimoga, Kolar, Bellary, Mysore, Mandya and Kodagu districts. The condition of the held-over rice stock has worsened due to improper preservation.

Larvae of worms and insects have infested the stock forcing the food department to fumigate the rice, official sources told Deccan Herald.

Meanwhile,  an independent assessment in July by the Hyderabad-based National Collateral Management Services Limited found that at least 16,000 tonnes of the rice was pest-infested. The assessment confirmed that the stock was substandard. Among other things, it contained 33 to 40 per cent of broken rice against the permissible limit of 25 per cent.

Though the department stopped procuring rice in February following complaints that the millers were supplying  substandard rice, it went ahead and cleared the bills of most millers. Of the total Rs 388 crore worth rice procured in 2013-14, bills to the tune of Rs 343 crore were cleared. Incidentally, the government procured the foodgrain at an enhanced price of Rs 24 per kg as against Rs 21.60 per kg the previous season.

To buttress its case against a combative section of millers who are demanding the rest of the payment due to them, the food department sent around 700 samples of the rice stock to the Central Food Technological Research Institute (CFTRI) for testing.

According to sources, since the samples have been sent for testing, there is no reason to hold the stock. But, the department is sitting on it. This, despite the Karnataka Food and Civil Supplies Corporation officials repeatedly informing the Food and Civil Supplies Department that the condition of the rice is getting worse and needs to be distributed quickly.

The corporation has suggested that the department either direct the millers to take back the foodgrain and replace it with good quality or take steps to auction it. But the Department has apparently decided to move only after obtaining the test report.

The CFTRI has sought at least five months to complete testing of the samples.
Food and Civil Supplies Minister Dinesh Gundu Rao admitted that the rice was pest-infested. “I know the rice is pest-infested and we are fumigating it. We will sift the rice that can be used and supply it. Broken rice and substandard rice will be returned to the millers,” he said.

The minister said he has convened a meeting of officials on Thursday to take a decision on the distribution of the stock.