Full Report Rs. 2500 Crore Rice Scam

Full Report Rs. 2500 Crore Rice Scam

Year 2008 – Year 2009
Rs 2500-crore rice export scam happened during the UPA 1 regime.

Ghana government exposed the Rs.2500 Crore  Rice Scam.
The government of India had banned export of non-basmati rice  to put a check on rising prices in the domestic market.

The Centre had, vide a government notification in October 2007  banned the export of non-basmati and 25 per cent broken rice.

As  India banned the export of Basmati Rice Internationally the price of Basmati Rice started to increase.
(From $350 to a peak of $1,000 a metric tonne)

After Ban Intelligent Indian minds broke all the rules and found the loopholes and


But later  an Empowered Group of Ministers on Food  had allowed export of up to 20 lakh tonnes of non-Basmati rice through diplomatic channels, mainly to African nations.

An Empowered Group of Ministers  included Nath, Pranab Mukherjee, and Sharad Pawar

All exports had taken place between December 2007 and March 2009 when the commerce ministry was headed by Kamal Nath.

Media reported that PSUs involved in export of this rice to Africa outsourced the efforts to domestic private companies.
It is claimed that the private companies made large profits while the PSUs reported small margins.

Twenty lakh tonnes of rice was exported to a third country under the pretext of supplying it to African nations under hunger alleviation projects.

Year 2009 -
JD(U) chief Sharad Yadav said that Delhi-based Amira Foods India Ltd and Shivnath Rai Harinarain India Ltd were allowed to procure at lower price and make huge profits.
He said even the Letter of Credit came from Switzerland-based Novel Commodities and not from Ghana.

Year 2010 –
Commerce and industry minister Anand Sharma said that
The exporting PSUs (public sector enterprises) of the department of commerce did not follow a transparent procedure for selection of domestic associates or determination of the price at which the rice was exported,"

How the Rice Scam happened?

The Union commerce ministry is the nodal agency for all exports and oversees public sector trading companies such as the State Trading Corporation, MMTC and PEC

Government of India first banned the Basmati Rice export.

After that decided to export Basmati Rice to poor African nations on the humanitarian grounds.

After this one poor country from Africa let’s say Ghana wrote a letter
The MEA, with a copy to the commerce minister, seeking rice at “concessional” or “preferential” rates.
The letter mentions the name of the private Indian company through which the proposed export must be routed.

Point to be noted –
DGFT guidelines say that  grain must be exported by a government trading agency. Grain, as per DGFT guidelines, must be procured and exported through STC, MMTC or PEC. The procurement must also have been done from more than one state.

We have seen that  Government received the letter of request for Rice
Now the commerce ministry gives its clearance and the director-general of foreign trade (DGFT) issues a notification formalizing the quantity of rice to be exported by the pre-selected private rice exporter.
The guidelines were broken.

The responsibility of procuring and shipping the rice was handed over to the private company named in the letters from foreign governments.

Because of this  Government companies got sidelined  and the contract was between private Indian companies and other nations.

It was decided that Rice will be sold on humanitarian grounds but in reality
Indian private companies sold rice  at prevailing international prices to the poor  country.

Now here is the big bomb in this  rice scam.

We know that  Switzerland is the country where all politicians and rich people deposit their black money.

In many cases, the letters of credit come from a third party—a trading company in Switzerland.

So exactly who was the buyer  and seller and who made the profits.

India is a poor nation we know that here many rich people keep their extra flats on the name of their driver and keeping honesty driver never cheats his boss.

Hope now you got the idea who made the profits?

How the scam came into light?

In Ghana government got changed and new government ordered inquiry
into the role played by the previous foreign minister, Akwasi Osei-Adjei, in one rice deal.
Ghana had in early 2008 written to the Indian government seeking several thousand metric tonnes of rice but wanted it only through a Delhi-based company, Amira Foods (India) Ltd. STC simply cleared the deal in favor of the company without inviting any tender.

Another Country - Sierra Leone
Year 2008 –
The country sought nearly 40,000 MT of rice on a preferential payment basis from India.
letter of credit  came from an international soft commodities trading company, Novel Commodities, with their offices in 1227 Carouge, Switzerland.
Thus letter of credit does not come from the government.
In this case also letter mentioned that rice be shipped through a Delhi-based rice exporting company, M/s Shivnath Rai Harnarain India Ltd. Sierra Leone sought another consignment in May ’09 through Amira.

The grain for both Ghana and Sierra Leone was sourced from mills in Andhra Pradesh

In simple language
Indian Market price was $280 per metric tonne  if it was sold at $470,
it meant a profit of $190 per metric tonne

But private companies made the profit not Government of India.


Reality views by sm –

Sunday, June 17, 2012

Tags -  Rs. 2500 Crore Rice Scam