MSc

Rice milling is the oldest and the largest agro processing industry of the
country. At present it has a turnover of more than Rs. 25,500/- crore per annum. It
processes about 85 million tonnes of paddy per year and provides staple food grain
and other valuable products required by over 60 per cent of the population. As
demand for food grain increases with the growth of population, the need for
efficient paddy processing units is felt in the country. Main challenges
encountered by the rice processors are to find appropriate solutions for quality rice
processing and meeting the demand of current population growth rate. This work
provides the basic information about the economics of rice mills in Kerala, factors
affecting the milling efficiency and also will study the stakeholder responses
(farmers, traders, and millers) on the rice milling industry.
The study was based on both Primary and secondary data. The primary was
collected from stakeholders in milling industry in Palakkad and Ernakulam
districts of Kerala. This includes millers, farmers and traders of Palakkad and
Ernakulum districts. Data was collected from 40 mills (20 from each district),
farmers and traders. The year 2016-17 is considered as the year of reference.
Capital investment pattern of rice mills in Palakkad and Ernakulam districts
were calculated and analysed. The results showed that from 1980 to 2017
investment on rice mills had increased from Rs. 30 lakh to 300 lakh. Capitallabour
ratio of 40 rice mills were also calculated and showed an inverse relation
between the ratio and capacity of rice mills. Low capital- labour ratio indicated a
higher profitability and employment generation in rice mills.
Response of the rice millers to the processing industry was analyzed.
Millers purchase paddy from farmers in weekly, monthly seasonally and irregular
time intervals. Major varieties preferred by the rice millers were Uma, Jaya,
Jyothi and TK-9. They mainly procure the paddy varieties from Tamil Nadu and
Karnataka farmers compared to the farmers in Palakkad and Alappuzha districts
due to the low price. Milling, polishing, supply to the exporters, local trading and by product trading are the major processing activities in rice mills. Major buyers
of rice from the rice mills were Traders, consumers, restaurants and public
agencies with varying number.
Efficiency analysis of rice mills was done using three tools such as
percentage analysis, financial ratio and Data Envelopment Technique. Capacity
utilization of rice mills were calculated using percentage analysis and found to be
higher for large capacity rice mills followed by medium and small capacity rice
mills. Financial ratios used were B:C ratio, Gross margin and Operating expense
ratio and proved that all the rice mills in Palakkad and Ernakulam were running
on a profitable basis. Data envelopment analysis showed the efficiency of rice
mills with a mean technical efficiency of 0.95 in Palakkad and 0.96 in Ernakulam.
Mean scale efficiency value of 0.91 and 0.93 was obtained from Palakkad and
Ernakulam districts respectively. Peer count and input targets of both districts
were also obtained from DEA analysis.
Major constraints in the rice milling industry were identified using Garret
ranking technique. Maintenance cost, labour shortage and irregularity in paddy
supply were the main three hindrances to the smooth functioning of rice mills.
With the increase in demand for processed rice in India and Kerala there is great need to improve the quality of rice and installed capacity of processing