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What went wrongA husking rice mill owner in Adamdighi, Bogura, in a Prothom Alo report

2,400 taka a maund to produce, 2,250 to sell: 233 mills closed

A conventional husking mill spends about 2,400 taka a maund to produce rice that sells for 2,250, losing 150-200 taka on every maund. In the upazila 233 mills have closed and about 7,000 workers have lost their jobs.

Conventional husking mills spread through Adamdighi in Bogura after the 1990s and were profitable until automatic rice mills arrived in the upazila in 2004. This owner's mill at Santahar turns out 154 metric tons in a fortnight; one nearby auto mill produces 48,000 tons across three units in the same time. At current paddy prices his production cost is about 2,400 taka a maund against a selling price of 2,250 - a loss of 150 to 200 taka on every maund. The gap is not only scale: a conventional mill extracts 25 kg of rice per maund against 28 in an auto mill, and auto mills also sell around 40 sacks of bran from 600 maunds of paddy at about 2,000 taka a 50-kg sack, where husking mills get almost nothing for the husk. On top of that, cheap bank credit to buy paddy in bulk straight after harvest goes to the auto mill owners and not to them. Two hundred and thirty-three mills in the upazila have closed after their owners lost their working capital, putting about 7,000 workers out of work.

Lessons

  1. 1.When a competitor's technology gets 28 kg of rice per maund against your 25 and sells the by-product too, no amount of effort closes that gap
  2. 2.The real advantage in rice milling is access to cheap seasonal credit to buy paddy at harvest, not the mill itself

Published with the person's permission, without revealing who they are.

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