According to a status paper prepared by the All Orissa Rice Millers' Association, the state produces on an average 60 lakh tonnes of rice per annum and out of this, as high as 80 per cent is being manufactured in the unorganised sector.

Pointing out that the output of rice through mills is 68 per cent compared to 62 per cent in traditional method, the paper states that the loss is about Rs 50 per quintal because of low out put and another Rs 25 on account of the wastage of rice barn in the unorganised sector.

Blaming the state food policy for this state of affairs, the paper says that the stagnation in production and marketing, obsolete technology, the system of contributing to the central pool through Food Corporation of India, and the continuationof Permit Raj has dissuaded the millers to play a pro-active role in processing the rice.

Orissa had kept the percentage of levy at a high of 75 per cent compared to around 25 per cent in Bihar and West Bengal. This only ensures minimum support price for the entire surplus produce and nothing more.

Moreover, the millers concentrate for about 9 months on production and delivery of levy rice instead of focussing on manufacturing different variety and quality of rice.

As such, the millers are not interested to venture into the marketing of rice because of high rate of taxes in the state. While there is no tax on rice and paddy in Madhya Pradesh and Maharashtra, Orissa levies 4 per cent sales tax besides a marketing fee on both rice and paddy.

This makes the rice in Orissa about 7 per cent costlier than the commodity in other states, the paper points out.

On the export front also, the state does not have a definite policy to promote marketing of rice abroad. The rice millers have had the bitterexperiences in the field of exports because of inconsistent government policies and abrupt changes in the method of implementation.

Citing an example, the paper says that the state government is yet to extend the tax benefits to the exporters under sub-section 15(ca) of the Section 15 of the Central Sales Tax which defines paddy and rice as a single commodity.

Orissa produces a substantial quantity of exportable non-basmati rice. The state has also the potential to produce basmati rice. The export of the surplus rice would ensure a better price to the farmers, the paper opines.

The 600-odd rice mills in the state have the potential to grow by about 300 to 400 per cent given a conducive market atmosphere. These mills could be upgraded and modernised thus saving the State from the loss due to the wastage of rice and barn.

But, because of the faulty food policy of the state government should immediately announce a progressive food policy to save millers, farmers and also the consumers of the state. Theysuggested that the levy rice collection should be rescued to an optional 25 per cent, the sales tax and market fee on rice should be abolished, and the rice mills should be accorded industrial status.

They viewed that the food policy should be formulated keeping in view the provisions of the Central Food Policy and the policies of the neighbouring states. The association leaders also urged the government to announce a long-term export policy for international trading of rice.

They also insisted that the policy should be transparent.