The Uttar Pradesh government has announced a major relief package for farmers and the rice milling industry. Chief Minister Yogi Adityanath has declared a 1% recovery rebate on the milling of non-hybrid paddy across all rice mills in the state.
This decision is expected to bring direct financial relief to farmers, boost employment opportunities, and attract fresh investment in the agro-industrial sector. The move is being hailed as a ‘Paddy Milling Relief Package’ aimed at strengthening the state’s agri-economy.
According to the government, the scheme will directly benefit around 13 to 15 lakh farmers and over 2,000 rice millers across Uttar Pradesh. The state has allocated ₹167 crore as compensation to implement this rebate, which is expected to generate nearly two lakh new employment opportunities.
The government believes that the 1% recovery rebate will encourage healthy competition among rice mills and speed up the government’s paddy procurement process.
With enhanced local milling capacity, the state will no longer need to import rice from other states for the Public Distribution System (PDS) saving significant national resources.
Earlier, the government already offered a 3% recovery rebate on hybrid paddy milling, with an annual reimbursement of about ₹100 crore.
This year, the state noticed that non-hybrid paddy was not yielding expected recovery rates, putting several rice mills under economic strain. Responding to this concern, the government has extended a 1% recovery rebate for non-hybrid paddy milling as well.
For this, the state will spend ₹166.51 crore from its budget. The move is expected to revive struggling rice mills, re-energize their participation in government procurement, and enhance industry competitiveness.
Earlier, many mills were reluctant to participate due to lower recovery margins, but with this incentive, they are expected to return actively to procurement centers, boosting both confidence and production.
The Uttar Pradesh government estimates that this decision will provide permanent employment to nearly two lakh workers in the rice milling sector. Additionally, mills will be able to utilize the compensation funds to modernize equipment and expand capacity.
Since mills are required to supply Custom Milled Rice (CMR) in advance to the Food Corporation of India (FCI), the rebate will encourage them to complete CMR deliveries promptly potentially ensuring 100% rice supply to the central pool by April.
Direct Benefits for Farmers: The 1% recovery rebate will intensify competition among rice mills, directly benefiting farmers. Now, all varieties of paddy hybrid as well as traditional will be purchased at government procurement centers. This move will encourage farmers to cultivate diverse paddy varieties and revive the cultivation of indigenous rice strains, ensuring both income stability and biodiversity preservation.
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