Telangana Contemplates Supplying Parboiled Rice to Kerala for Speedier Payments and Financial Relief

The Telangana government is considering supplying parboiled rice to Kerala, aiming to dispose of its produce quickly and receive cash inflows promptly. Kerala, known for its preference for certain varieties of parboiled rice, has expressed a desire to procure at least two lakh tonnes of these varieties. Telangana prefers this arrangement over supplying to the Food Corporation of India (FCI), which has been responsible for procurement in the region but has delayed payments.

One primary reason for Telangana's eagerness to supply rice to Kerala is the expectation of faster payment compared to the delays experienced with the FCI. Telangana is planning to impose a condition that payments from Kerala must be completed within three months of delivery, including some form of advance payment. This decision comes in light of Telangana facing over ₹3,000 crore in interest losses due to FCI's payment delays. The state has been compensating farmers immediately using bank loans and other financial sources, leading to substantial interest accruals.

The potential rice deal between Telangana and Kerala was discussed in a meeting between Telangana's Minister for Civil Supplies N. Uttam Kumar Reddy and Kerala’s Minister for Food and Civil Supplies G.R. Anil. Anil showed interest in procuring the parboiled rice from Telangana. The final decision on pricing and other modalities will be determined in an upcoming meeting between the Commissioners of Civil Supplies of both states. Telangana has indicated a willingness to supply the rice at ₹39 per kilo, the same rate offered by the FCI, as this would alleviate the financial burden of interest payments to banks.