By Gargi Prasai
Seventy-five years after its existence and faced with competition from global players the SMEs of Roller Flour Millers Federation of India finds itself at crossroads.
On one hand the mills need to keep pace with global technological advances in maintaining quality and nutrition standards in the production and trade of processed wheat products, on the other they are increasingly under pressure for cost effective procurement of quality raw material, i.e. wheat. Diversion of food grains from the subsidized Targeted Public Distribution System that provides grains to 67 per cent of the population is estimated at Rs. 30,000 crore.
This is besides the subsidy of nearly Rs. 1.24 lakh crore that the government will incur to sell wheat at Rs 2 per kg, rice at Rs 3 per kg and coarse cereals at Re 1 per kg to identified beneficiaries of the TPDS under the National Food Security Act, 2013. For now only 11 states are implementing the Act but by next March all states will be on board.
At its 75th Silver Jubilee function celebrated in New Delhi, the President of RFMFI Hitesh Chandak offered the government millers’ processing capacity to supply Atta through the Targeted Public Distribution System at an additional cost of 0.8 paisa per kilogram and suggested cash transfers in the long run as a solution to plug leakages in the TPDS. Also the nearly 2000-strong flour milling industry wants wheat and wheat products out of the GST list to keep the prices of wheat under check and prevent inflationary pressures on this count.
Be that as it may, it is no secret that even organized millers are the one of the large beneficiary of grains diversified under the highly subsidized TPD. While FCI (Food Corporation of India) is the largest procurer of the wheat that comes to the man-dis, flour millers are part of the system and as much influenced by government policy as farmers and consumers.
Millers bemoan that they cannot procure directly from farmers as several states have not amended the APMC (Agriculture Produce Marketing Committee) Act and with man-dis taxes as high as 12 to 14.5 per cent in major wheat producing states of Punjab and Haryana, they are forced to look at the grey market for their full requirement and wily Nelly become a part of the diversified grain system.
A major concern for the industry is the quality of the stored raw material. The FCI has a policy of FIFO (first in, first out) and this impacts the quality of the wheat which undergoes fumigation in storage to keep away pests. In any case milling takes away some of the protein content of the wheat and the millers are now under pressure from the government to not only maintain moisture and protein levels but also go in for iron and protein fortification.
Industry bigwigs like Vijay Sardana admit that against this background the industry will have to rise to the occasion not only to survive and grow but to attract investments and meet competition from foreign finished wheat products that are flooding the market.
Image Courtesy : RFMFI