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Now, Rs 120 cr cloud over PAU 201 paddy

The ghost of PAU 201 paddy refuses to die. Now, there is a “misappropriation” of more than Rs 120 crore set to explode on rice millers as well as the FCI in Punjab, once the stocks of milled and unmilled paddy from 2009 and 2010 are tallied.

chandigarh Updated: May 22, 2011 21:23 IST
Ravinder Vasudeva

The ghost of PAU 201 paddy refuses to die. Now, there is a “misappropriation” of more than Rs 120 crore set to explode on rice millers as well as the FCI in Punjab, once the stocks of milled and unmilled paddy from 2009 and 2010 are tallied.

The central government has paid the amount to the state's rice-millers as compensation thus far to “upgrade” the discoloured paddy of PAU-201 variety from 2009. In this process, the bad grains are removed using machines.

However, instead of supplying rice after cleaning the 2009 paddy, most millers are supplying rice from the 2010 stock, thereby cutting into the later batch.

The paddy procured by the Food Corporation of India (FCI) - the central government agency responsible for procurement and storage of food grain - is being milled for it on contract.

As paddy from the old as well as fresh stocks is stored at the millers' premises, they are suspected to have diverted the fresh rice as old, while at the same time accepting payment from the government for “upgrading” the old paddy.

This subsidy of Rs 200 per quintal for millers in Bathinda and Mansa districts and Rs 100 per quintal for those in the rest of Punjab was announced by the central government in September last year following an uproar from millers over the quality of the PAU-201 variety.

While announcing the upgrade compensation, the government had first fixed January 31, 2011, as the deadline to clear the PAU 201 variety, which was later extended to May 15 and then July 15.

According to rules, any miller yet to clear rice from the previous year cannot deliver rice from the fresh crop.

To confirm the extent of replacement of 2009 paddy with fresh stock, HT obtained from procurement agencies a list of their unmilled stocks from 2009 and 2010 lying with millers in a few districts.

On visiting the premises of more than 15 mills in Mansa, Bathinda, Sangrur, Barnala and Patiala districts, HT found huge stocks from 2010 missing, which was clear indication that these had been passed off as 2009 stock. Bags from 2009 were still lying at the mills.

Speaking on the condition of anonymity, one miller in Sangrur district admitted he had received the upgrade charges, but not cleaned the 2009 paddy. “The damaged content in the batch is so high that it is beyond improvement. To begin with, it had greater discolouration than acceptable, and then the paddy has been stored in the open for two years, which has caused further deterioration,” he said.

However, he had no answer as to how he proposed to replenish the 2010 paddy that he had passed off as the 2009 stock.

It is apprehended millers would mix the “damaged” crop of 2009 with the remaining 2010 paddy, thereby passing on the bad rice to consumers. They are also seeking from the government a lowering of the specifications for the 2010 variety.

According to official records, there was around 17 lakh tonne of the PAU-201 variety awaiting milling before the announcement of the upgrade subsidy in September last year. Since then, around 12 lakh tonne has been accepted from the millers by the FCI, for which it has paid Rs 120 crore. Around 5 lakh tonne remains with millers.

FCI deputy general manager Aseem Chhabra, when contacted by HT, said the agency had accepted the 2009 rice only after getting it physically verified by the food and civil supplies department of the state government. “I am not aware of any such practice (of passing off 2010 paddy) by millers,” he said.

On his part, Punjab food and civil supplies secretary DS Grewal too said the department had no information of millers indulging in any such practice. “If there is any such misappropriation, we will penalise them as per rules,” he said.

The fact that both officials denied knowledge of the misappropriation indicates none has made a physical verification of the stocks lying at the mills.


One sure giveaway that the rice the millers have supplied to the FCI as the 2009 batch is actually from 2010 is the moisture content. The rice has been officially recorded as containing more than 14% moisture.

However, according to the Foodgrain Technologists Research Association, based at Hapur, Uttar Pradesh - the technical advice of which the FCI follows - the moisture content of rice stored at temperatures between 25°C and 36°C is 12.03%. If the temperature increases, the moisture content decreases.

Since the crop of 2009 has gone through two summers, and temperatures in the region go up to 45°C, the moisture could not be more than 14% if the rice were actually from 2009.