Patna,(BiharTimes): In one of the biggest scam in the state in the recent years the officials of the Bihar State Food and Civil Supplies Corporation Ltd (SFC) have, in connivance with the private rice-mill owners of the state, siphoned off Rs 535 crore of rice.

According to the documents available with the BiharTimes the state suffered a loss to the tune of Rs 535 crore after private rice mills, who were given paddy to process, defaulted and did not supply the rice they owed to the government company. The state government has filed cases against 38 mills and is preparing to start recovery proceedings against another 112, including auctioning their property. 

Sixty-one of these 112 mills are in Aurangabad district while 48 in Buxar district. Another 100 mills are expected to face recovery proceedings in the coming weeks.

The roots of the massive scam can be traced in the state government’s 2011-12 decision to take over paddy procurement from the Food Corporation of India (FCI). Under this scheme, the state government bought 21,08,375.16 MT of paddy worth Rs 2,220.11 cr through the Primary Agriculture Credit and Cooperative Society (PACCS) and directly from the farmers at Rs 10,800 per MT. This paddy was distributed to 963 mills across the 36 districts by the SFC for being processed into rice.

As per the new system, a mill enters into an agreement with the district SFC committee and has to deposit at a local FCI godown a predetermined quantity of rice that has already been processed. The mill gets new paddy from the SFC for processing after FCI confirms receipt of the “advance rice”.

A mill was supposed to get 100 quintal of paddy if it deposits 68 quintal of boiled rice or 67 quintal of raw rice.
Documents available with the BiharTimes, however, reveal that the SFC violated this main clause of the agreement. No advance paddy was deposited by even a single mill before new paddy was released for processing. Moreover, the SFC took a security deposit of just Rs 50,000 from each mill while allotting them paddy worth anywhere between Rs one crore and Rs 15 crore.

The mill-owners reportedly sold the paddy they got. Some of them alleged that they had to bribe SFC officials Rs 40 per quintal of paddy allotted to get large allotments.

It is not that the state government was not aware of all these activities of the mill-owners and SFC officials. It was as early as August 3, 2012, that the president of Nagrik Adhikar Manch and leading RTI activist Shiv Prakash Rai had written a letter to the public grievances cell of the chief minister drawing the attention towards the alleged large scale corruption including the sale of government paddy in the open market by mills. He gave details of alleged irregularities and demanded a thorough probe. The activist had also marked a copy of his complaint to the CM’s office to the principal secretary for food and consumer protection and the principal secretary, vigilance department.

He said on October 18, 2012, vigilance department joint secretary Virendra Singh wrote to principal secretary, food and consumer protection, to take necessary action. Rai told BiharTimes that he had also urged the government to monitor five mills from each district to know the extent of corruption. However, no such action was taken.

In spite of Rai’s stand Food and Consumer Protection Minister Shyam Rajak, is reported to have said no such complaint was brought to his notice. 

As per the agreement the mills had to deposit the rice on behalf of the state government at the FCI by October 31, 2012. However, documents with BiharTimes show that the mills did not account for 33.17 per cent of paddy worth Rs 736.41 crore by January 13 this year.

A new deadline of February 28 was set and then extended to April 30. By the end of this last deadline the SFC had collected 11,69,653 MT of rice of the total 14,46,589 MT due from all 38 districts in the state. Thus there was a shortfall of 2,76,936 MT, with each MT valued at Rs 19,310.

Not only that. Of the 963 mills chosen to process paddy, less than 500 are registered with the industry department of the state government and comply with pollution control norms. But the SFC apparently overlooked these considerations and allotted paddy to them. 

About 50 mills including 10 in Buxar alone existed only on paper. The January 13 RTI reply by the government did not mention the locations of 120 mills in seven districts, including 36 in Banka, 14 in Darbhanga, 16 in Samastipur and 19 in Kishanganj.