Cost analysis of operating a medium sized rice processing mill in Bhutan

Kinga Norbu


The study aimed to ascertain the cost of operating a medium sized rice mill in the country. The fixed cost and variable cost were calculated for operating the rice mill. An empirical formula was derived to forecast the revenue generated while running the operation. The moisture content of paddy during purchase may not greatly influence the profit margin as the loss is not significant when the quantity is huge. The rice milling recovery at 67% indicated satisfactory performance of the mill; remaining 33% consisted of husk, bran and the broken grains. Hence it is important to ascertain alternative use of the by-products which also add up to the profit. There is a significant difference between the cost of milling with subsidy from the government, or investment in rice mill and infrastructure and also with rental charge on these facilities. Still it is a good business to own and run a rice mill.


Cost of operating; rice mill; milling recovery




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