The main objective of this study is to examine the structure, conduct and performance of the rice milling industry in the Polonnaruwa and Hambantota Districts. The structure, conduct and performance approach is adopted to analyze competitive conditions in the rice milling industry by examining how the structure of industry relates to the rice market conduct and performance. The study focuses on the behavior or different participants involved in the industry, industry concentration, paddy to rice process, personnel profile of millers, entry barriers to industry, paddy rice buying and selling practices, pricing, intervention of intermediaries, storage, credit, constraints, product standards, price spreads, product behavior, processing costs and utilisation of by-products. The study reveals that the rice milling industry in Polonnaruwa is slightly concentrated and in Hambantota, in a very competitive atmosphere. The major entry barriers to industry are lack of capital, lack of experience and knowledge on million technology, high competition and unstable output market. The report provides an in-depth overview of the rice milling industry.