AP offers financial package to bail out sick rice mills

Hyderabad, Oct 21 | Updated: Oct 22 2004, 05:30am hrs
Anticipating a bumper paddy crop this year, the Andhra Pradesh government plans to revive the rice milling industry extending a financial package to it.

Acccording to official sources, it has already asked the financial institutions including commercial banks and AP State Finance Corporation (APSFC), which have extended finance to a majority of small and medium rice mills in the state, not to dispose of the seized mills.

In fact, the government is working on a revival package to reopen the mills. "Otherwise the farmers have to transport paddy for long distances for milling purposes," sources said. Though the State has enough rice mills, a total of 3,351 covering the paddy grown districts, less than 50% of them are in full operation.

While over 1,145 mills have been termed as sick and many of them were seized by the commercial banks and APSFC towards loan payments, said APK Reddy, president, AP Incipient Sick SSI Federation, taking up the cause of the sick rice mills in the state.

Mr Reddy said that the reason for sickness in the rice mill industry is acute and protracted drought. Each mill was established with an investment of roughly about Rs 2 crore, which now has to be repaid to the financial institutions.

"We want the government to insist the financial institutions to reschedule the loan payments by extending a six month moratorium," Mr Reddy said. The association is agitating against the attitude of the financial institutions who are offering one-time-settlement (OTS), which is very difficult for the miller to comply. As things appear, the millers are hoping good business in the current year, enabling them to either comply with the OTS or make the loan amount active.