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                         ERLY INDUSTRIES INC.         
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               (Name of Registrant as Specified In Its Charter)

                               THE POWELL GROUP
                       FARMERS RICE MILLING COMPANY, INC.     
                               NANETTE N. KELLEY
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   (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

   
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Notes:

 
                                                           FOR IMMEDIATE RELEASE

                                                                COMPANY CONTACT:
[LOGO OF THE POWELL GROUP]
                                                                  Nanette Kelley
                                                                       President
                                                                  (504) 922-4540

                                   POWELL GROUP SUBSIDIARY FILES LAWSUIT AGAINST
                                        THE SENIOR MANAGEMENT OF ERLY INDUSTRIES

                          BATON ROUGE, LOUISIANA, AUGUST 14, 1997...Farmers Rice
Milling Company, a wholly-owned subsidiary of The Powell Group, which together 
with Powell Group President Nanette Kelley owns approximately 3.8% of the common
shares of ERLY INDUSTRIES, INC. (NASDAQ:ERLY), announced today that it has filed
a lawsuit in U.S. District Court for the Central District of California against 
Gerald Murphy, chairman of the board and chief executive officer of ERLY, and 
Douglas Murphy, chief operating officer and a director of ERLY, alleging, among 
other things, breach of fiduciary duty, waste of corporate assets, and the 
making of illegal corporate loans in connection with the defendants' personal 
investment in a real estate development project in Texas.

     The lawsuit seeks injunctive relief prohibiting ERLY Industries and its 
subsidiary, American Rice Company, from continuing to make loan payments on 
behalf of Gerald Murphy and Douglas Murphy, repayment by the defendants to ERLY 
Industries and American Rice of legal fees and expenses incurred in connection 
with the alleged wrongful conduct, and punitive and exemplary damages.

     "This is just the latest chapter in the long and sorry history of 
mismanagement of ERLY by the Murphys, who since 1987 have produced a pitiful 
return for their shareholders totaling less than 1% annually while the Dow Jones
Industrial Average has more than tripled. As major shareholders we intend to put
a stop to this right now," Kelley said.

     On July 31, 1997, Kelley and The Powel Group Companies filed a Consent 
Solicitation with the Securities and Exchange Commission seeking approval to 
solicit ERLY shareholders with respect to removing the current board of 
directors and prohibiting the officers of ERLY from excessive expenditure of 
corporate funds in connection with the election of directors.

     A privately-held holding company based in Baton Rouge, Louisiana, The 
Powell Group has interest in rice farming, rice milling and storage, rice 
hull-to-electricity generation, radio broadcasting, commercial and residential 
real estate development and construction, travel management services and timber.

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