Hundreds of rice mills in Naogaon, the largest rice producing district in the country, have been shut down in the last 12 years due to continuous setbacks and rice mill owner’s inability to compete with large corporate traders.
Thousands of workers have become unemployed.
The leaders of district Rice Mills Owners Association gave a memorandum to the former Commerce Minister through the deputy commissioner of the district after organisinga press conference in Alupotti area in the district town recently.
According to district rice mill owners, every year a sufficient number of paddy is produced in Naogaon. With this advantage, nearly 2,000 husking rice mills were stablished in the district during the 1980s. However, with the rise of auto rice mills and high bank interest rates at that time, more than half of these husking rice mills closed down between 2012 and 2014.
Now, only 315 mills remain operational, and those that have survived are burdened with debt.
Recently, as corporate houses have started selling packaged rice, it has begun to impact the auto rice mills. As a result, alongside the husking mills, auto rice mills have also started shutting down.
According to sources, over 900 rice mills, including both husking and auto mills, have closed down in the past 12 years due to not being able to compete with the corporate businesses.
Additionally, out of the 79 auto rice mills established 10-12 years ago, 11 have shut down, and 44 are in dire condition. Some of the owners have gone bankrupt, and several are in jail due to debt.
Currently, only 20-24 mills are operational. As mills continue to close one after another, around 35,000 workers have become unemployed, and the affected business owners are facing losses of millions of taka along with entanglement in bank debts.
Many of the closed rice mills and chatal(a paved platform for drying and husking paddy) have been converted into plastic factories, poultry farms, and cattle farms. Since the establishment of auto mills, the owners of husking mills have been facing losses. Additionally, with corporate companies entering the rice business, all mill owners are now facing significant challenges.
Husking rice mill owners say that due to the absence of government regulations, small and medium-sized mills are being forced to shut down as corporate traders and large automatic rice mill owners manipulate the market at will.
They also mentioned that corporate traders receive loans at an interest rate of just four per cent, and by using their brand nameon theirpackagedrice, they earn a profit of Tk 7-10 per kg.
On the other hand, the husking and auto-rice mill owners used to get loans from banks at a minimum interest rate of 13 per cent, yet they earn a profit of only Tk 1-2 per kg of rice.
Automatic rice mills owners said that due to the syndicate of the country's leading corporate companies, both husking mills and auto-rice mills are suffering.
District rice mill owners said that in an auto rice mill, 10 workers can produce 30 tonnes of rice in 24 hours. In contrast, a husking mill requires 15 workers to produce the same amount of rice in a week.
They claimed that when a husking rice mill shuts down, each business owner faces losses ranging from Tk 10 lakh to Tk two crores. Conversely, when an auto rice mill shuts down, the losses for each owner range from Tk five crores to Tk 25 crores.
They further said that they are adversely affected by the government's flawed policies in rice and paddy procurement, the lack of coordination in price setting, and the frequent increases in electricity and diesel prices, which raise production and transportation costs.
The high interest rates on bank loans and other factors are pushing this industry to the brink of collapse, they added. They urge the government to take necessary steps as early as possible.
During a visit to theMamoni Auto Rice Mill in Naogaon’s Pirojpur, this correspondent found that the mill had shut down almost two years ago. The same situation exists at the Jahanara Auto Rice Mill in the Bypass area.
In Hapaniya, the Disha Automatic Rice Mill had to sell off everything except its warehouse to repay bank loans. The Sami Auto Rice Mill in NaohataMor, Mahadebpur, is now waiting to be sold.
The owners of KafilUddin Rice Mill, Bismillah Auto Rice Mill, and Karim Automatic Rice Mill in Mahadebpur Sadar have declared bankruptcy in court due to debt. The Mirjan Automatic Rice Mill in Pirojpur, Nahar Automatic Rice Mill in the Youth Development area, and Shaha Auto Rice Mill in Sultanpur no longer exist. The land of North Bengal Auto Rice Mill in Naogaon’sChakbari is being sold off in plots.
Mojahar Ali, the former owner of the Russell Rice Mill in Chakgauri ofMahadebpur, said, "I was involved with rice milling for nearly 30 years. At that time, 15-20 workers were employed at my mill. Three years ago, I sold the rice mill. Some of those who were in the business around me are now using their mills to grind husks instead of husking paddy. Some have rented out their mills, while others have started raising broiler chickens."
He further said that some corporate traders have large mills with high production capacity. Some rent large paddy husking yards to produce rice, while others collect rice from auto rice mills, package it, and sell it for higher profits.
Conversely, since auto rice mills require more paddies compared to husking mills, they buy paddy at higher prices. Although our small rice mills need fewer paddies, we still have to buy it at higher prices. Due to increased labour costs and other factors, we suffer losses, leading many like me to sell their mills.
Sheikh FaridUddin, the owner of Fariha Rice Mill in Naogaon Sadar, said, "With the rise of auto rice mills, many workers have lost their jobs and switched to other professions. However, some husking mills still exist, struggling to survive with great difficulty."
Farhad Hossain Chakdar, the general secretary of the District Rice Mill Owners Association, said, "There was a time when husking rice mills were profitable. But due to the lack of specific government policies, unnecessary imports, corporate syndicates, the creation of more mills than needed, and the inability to recover overdue payments, many mills are shutting down."
He further added, "Rice millers need to obtain and renew various licenses for their mills every year. This process costs around Tk two lakh, including legal and illegal fees, and is extremely cumbersome."
Muhammad Tanvir Rahman, the recently transferred food control officer of Naogaon district, said that there are currently 315 operational husking rice mills and 79 contract-bound auto rice mills in the district. Previously, 883 rice mills were contracted to supply to government warehouses, of which 51 were automatic rice mills and 832 were husking mills. Over time, one by one, both husking and auto rice mills are closing down.
Regarding the closure of rice mills, he said that husking and auto rice mills are unable to compete with corporate businesses, leading to their shutdowns. This situation is causing losses for business owners and leading to job losses for hundreds of people. He emphasised the urgent need for immediate action on this issue.
