Telangana CID arrests 14 rice millers over fine paddy diversion

Telangana's Crime Investigation Department (CID) arrested 14 rice millers on Sunday, October 25, 2026, over the alleged diversion of fine-variety paddy that the state had given them for milling under government procurement. According to the CID, some millers sold the premium "Sanna Rakam" (fine) paddy on the open market and handed back cheaper "Doddu Rakam" (coarse) rice, including rice brought in from other states, in its place. Three criminal cases have been registered, and those arrested were to be produced in court on Monday, October 26.

The case goes to the heart of how India's public food system works. Every season, state agencies buy paddy from farmers at the minimum support price. Because the government does not mill rice itself, it hands the paddy to private rice mills under custom milling agreements. The mills hull and polish the paddy and must return a fixed quantity of rice, known as custom milled rice (CMR), to the state or the Food Corporation of India (FCI), which then supplies it to the public distribution system and other welfare schemes.

That arrangement depends on trust and checks. Fine-variety rice fetches a much higher price in the open market than coarse rice. If a miller sells the fine paddy privately and returns cheaper coarse rice, the miller pockets the difference, the government loses money, and the people who are supposed to receive quality rice through welfare schemes end up with an inferior product. According to the CID, laboratory tests caught exactly that mismatch in this case.

The case also matters for farmers. Fine paddy is bought from them at public expense; if it is quietly diverted, the procurement system's purpose and its finances are undermined. Large-scale diversion can also distort open-market prices for both fine and coarse rice.

The estimates of loss differ widely across reports, from about Rs 1.69 crore in lost bonuses in one account to a potential loss of about Rs 242 crore that officials say was prevented by stopping further allotments. The final figures will depend on the investigation. The accused have not been convicted, and the allegations will be tested in court.

Telangana rice milling case: at a glance Item | Detail Arrests | 14 rice millers, October 25, 2026 Agency | Telangana CID Cases registered | Three Allegation | Fine paddy diverted, coarse rice supplied instead

Short-term: Rice mills handling government paddy in Telangana are likely to face closer inspection and testing during the current kharif procurement season, and the arrested millers face court proceedings.

Long-term: The case may push the state to tighten checks on custom milling, such as more frequent quality testing, stricter tracking of paddy stocks and penalties for defaulting mills, to protect public money and the quality of welfare rice.

Who is affected: Paddy farmers who sell to the government; rice millers working under custom milling agreements; the Telangana Civil Supplies Corporation and the FCI; and families who receive rice through the public distribution system.

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