Punjab FRK Manufacturers Take Legal Action Against State Procurement Agency
In a significant development from Bathinda, manufacturers of fortified rice kernels (FRK) have approached the Punjab and Haryana High Court with serious allegations against Punjab State Grains Procurement Corporation Limited (Pungrain). The manufacturers claim that the state procurement agency has implemented arbitrary and unconstitutional alterations to the established supply chain by modifying FRK supply rules midway through the procurement process.
Legal Challenge Against Rule Changes
A consortium of Punjab-based FRK manufacturers, who were officially empanelled for the kharif marketing season 2025-26, has filed a petition under Article 226 of the Constitution of India. They allege that two specific letters issued by Pungrain—dated December 15, 2025, and January 13, 2026—directly violate the terms outlined in the request for proposal (RFP) that was originally issued on August 5, 2025.
The manufacturers contend that these communications represent a fundamental change to the agreed-upon rules and have formally requested the court to quash these letters. The court has scheduled further proceedings on this matter for January 28, 2026.
Background of the Fortified Rice Program
The original RFP was designed to empanel FRK manufacturers who would supply nutrient-rich rice kernels to rice mills across Punjab. These fortified kernels contain three essential micronutrients: iron, folic acid, and vitamin B12. The blending process occurs within custom milled rice (CMR), which is then delivered to the national pool managed by the Food Corporation of India (FCI).
Under this program, a total of 126 manufacturers were empanelled to supply fortified rice to rice millers throughout the state. The RFP had established a fixed rate of Rs 39.8 per kilogram for FRK, with specific provisions in Clauses 9, 10, 11, and 12 that required rice millers to place orders directly with the manufacturers.
Alleged Violations and Operational Disruptions
The manufacturers assert that Pungrain's December 15 letter introduced a "first come, first served" system for supplying consignments to rice mills, which directly contradicts the terms specified in the original RFP. The subsequent January 13 communication introduced another mechanism for issuing "release orders," effectively altering the established supply chain, allocation procedures, and payment structure.
According to the petition, these actions by Pungrain—taken after work contracts had already been awarded—constitute changing the rules of the game mid-process. The manufacturers argue that such actions deserve to be struck down as arbitrary and in violation of Articles 14, 16, and 19(1)(g) of the Constitution of India.
Industry Impact and Financial Concerns
The new action plan implemented by Pungrain is expected to lead to several negative consequences, including the arbitrary exclusion of empanelled manufacturing units, significant disruption of production planning, and substantial financial distress across the industry.
Akhil Bharatiya Rice Sheller Sangh president Prem Goyal confirmed that rice millers are particularly unhappy with these clause changes, especially since they were implemented after the supply chain had already commenced operations. The inconsistent decision-making and procedural delays have created operational disruptions throughout the fortified rice ecosystem.
Millers report that the current working mechanism is causing considerable uncertainty and financial strain. This situation is further complicated by the pricing disparity between Punjab and other states. While Punjab's FRK procurement price is set at a minimum of Rs 39.48 per kilogram, other states have established rates ranging between Rs 58 and Rs 62 per kilogram.
FRK manufacturers have raised concerns that their manufacturing costs already exceed the tender price established in Punjab. This economic pressure, combined with the recent rule changes, is reportedly affecting the supply of fortified rice kernels in the state. Punjab requires approximately 1.05 lakh tonnes of FRK to meet its fortified rice distribution targets, making the stability of the supply chain particularly crucial for public health objectives.
