Indian Rice Market | Prospects of Rice Mill Modernization in India

Indian Rice Industry

Growth of rice: In India, the area where rice grown is called western coastal strip, the eastern coastal strip, covering all the primary deltas, Assam plains and surrounding low hills, foothills and Terai region- along the Himalayas and states. The major rice-growing states in India are West Bengal, Uttar Pradesh, Andhra Pradesh, Punjab, Tamil Nadu, Orissa, Bihar, and Chhattisgarh, which contribute about 72% of the total rice area and 75% of total rice production in the country.

States/UT
West Bengal
Uttar Pradesh
Andhra Pradesh
Punjab
 Orissa
Bihar
Chhattisgarh
Rice
14711
12221
11565
11107
8286
6377
6021
Area
5386
262
3809
2894
416628
3268
38085
Average Yields
273 138
208 236
3036 35
3837 94
1988 84
1951 40
195140

As the dominate food in India, rice is the staple food of the people of the eastern and southern parts of the country. India is one of the largest producer of white and brown rice all over the world, which takes about 10% of the globe rice production. Rice in India is not only the most popular food but a key part for India’s national economy. Indian rice industry has developed a strong position in exports, reaching 25% of market share of global trade.

rice planting in Indian

Paddy production in India: The weak rains and unseasonable climate in India disrupted the paddy planting operations resulting in a significant decline in output by 2.12 MMT from 105.48 MMT in FY 2014-15 to 103.36 MMT in FY 2015-16. In 2016, the forecast of above average rainfall and normal growing conditions are expected to improve paddy cultivation which would lead to rise in production by 2% to 105.6 MMT.

Exports: As per FAO, in 2016, the rice exports from India are expected to decline 8% (4,00,000 tonnes) to 10.2 MMT owing to the combined impact of tighter supply availabilities and restrained demand from key buyers. Despite this, India continues to remain the most competitive export location with ample stock in the hands of the Government for expanded public distribution.

Problems Existing in Indian Rice Industry in the Past

▲ Lack of adequate infrastructural facilities like road network, transportation, grading, handling, cargo and storage etc. coupled with inadequate post-harvest management has adversely affected the performance of Indian rice industry. There is an urgent need to encourage public-private partnership in building such facilities and ensuring there proper maintenance.

▲ Lack of advanced technological equipment causes rice plants to be inefficient in terms of energy efficiency, maintenance and productivity, resulting in high production costs. Thus increasing the affordability of farmers to grow rice.

▲ Lack of fund for purchasing modern rice machines: there wasn't enough investment to buy modern rice milling machine (automatic and semi-automatic). Locally-produced rice mill machines cannot satisfy India’s increasing market demand on quality rices. Rice mills in India have not been fully modernized to ensure high milling recovery and reduce the percentage of broken rice. Therefore, conventional mills are required to be modernized to get recovery of higher percentage of head rice suitable for export.

Current Situation and Prospects of Rice Mill Modernization in India

Policy issues: Government is promoting rice production through a combination of support prices, assured procurement and subsidies on key inputs like irrigation, chemical fertilizers and electricity — the major proportion of input subsidies is consumed by rice. India’s competitiveness in the rice market benefits from its low costs of paddy rice production, supportive government policies, but is hindered by poor milling and storage infrastructure

Government support: India heavily supports its rice farmers, who benefit from financial aid in purchasing fertilizer, fuel, and seed, and who are guaranteed a minimum support price (MSP) for their rice calculated to give them an adequate rate of return. The government has increased its technology and investment in modern rice processing. With huge investment and huge demand, the government has developed a number of policies conducive to the development of modern factories. With that, ‘modern rice milling machines’ as they were called started showing their magic.

In India, rice processing is the largest agricultural product in the agricultural processing industry. At present its turnover exceeds 3.65 billion rupee per year. India deals with about 85 million tons of paddy fields each year and provides the food and other valuable products needed for the population. With the increasing production of rice, the demand for high quality for rice processing equipment is growing. More than 50% of the recent rice production is processed by modern rice mill plant, 40% from the traditional mill, and the remaining 10% is stamping by hand. Indians are getting more knowledge on modern rice processing steps day by day. 

rice in field

What should be done to Speed up the Modernization of India Rice Industry?

▼ Production of quality seeds and ensuring availability to farmers at subsidized rates;

▼ Identification of varieties for rice based products; development of new products, processing techniques; attractive biodegradable packing; post-harvest care and by product utilization;

▼ Research efforts to develop implementable cultivation practices for organic farming and its effect on quality;

▼ Modernization of rice mills to ensure high milling recovery and effective availability of by products for full utilization;

▼ It is essential to increase investment in agricultural research and infrastructure development to improve agricultural productivity in a sustainable manner to meet the nutritional needs of an increasing population.

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