<PAGE>
<PAGE> 1                                              
===============================================================================
                                                                              
                  SECURITIES AND EXCHANGE COMMISSION   
                       WASHINGTON, D.C.  20549
                          _________________

                             FORM 10-K/A-1
 
            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934
                          _________________
                     
  FOR THE FISCAL YEAR ENDED MARCH 31, 1997       COMMISSION FILE NUMBER 1-7894

                          ERLY INDUSTRIES INC.
        (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                CALIFORNIA                       95-2312900
         (STATE OF INCORPORATION)     (I.R.S. EMPLOYER IDENTIFICATION NO.)

  10990 WILSHIRE BOULEVARD, #1800, LOS ANGELES, CALIFORNIA         90024-3955
      (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                     (ZIP CODE)


      REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (213) 879-1480
                            _________________

 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                            NONE

 SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

           COMMON STOCK, PAR VALUE $.01 PER SHARE
                      (TITLE OF CLASS)

    Indicate by check mark whether the registrant (1) has filed all reports 
    required to be filed by Section 13 or 15(d) of the Securities Exchange 
    Act of 1934 during the preceding 12 months, and (2) has been subject to 
    such filing requirements for the past 90 days.    Yes   X     No      
                                                            ---       ---

    As of August 1, 1997, there were 5,117,701 common shares outstanding and
    the aggregate market value of the common shares of ERLY Industries Inc. 
    (based upon the closing price for these shares on the NASDAQ National 
    Market) held by non-affiliates was approximately $35.6 million.

                    DOCUMENTS INCORPORATED BY REFERENCE
 
                                   None

    Indicate by check mark if disclosure of delinquent filers pursuant to 
    Item 405 of Regulation S-K is not contained herein, and will not be 
    contained, to the best of registrant's knowledge, in definitive proxy or
    information statements incorporated by reference in Part III of this Form
    10-K or any amendment to this Form 10-K. [  ]

<PAGE>
 
<PAGE> 2

                              PART II


Item 3.   Legal Proceedings

In April 1995, a lawsuit was filed in the district court of Harris County, 
Texas by Kingwood Lakes South, L.P. and Tenzer Company, Inc. as plaintiffs 
against G.D. Murphy and D.A. Murphy, Chairman and President of the Company 
and ARI, respectively.  ERLY and ARI were named as codefendants in the 
lawsuit by an amendment to the original petition in September 1995.  This is 
a dispute between the general partner of a proposed real estate development 
and G.D. Murphy and D.A. Murphy.  Damages sought are in the range of $10 
million, plus attorneys' fees and punitive damages.  The Company and ARI 
were named as codefendants in the lawsuit because of their actions to obtain
restraining orders to prevent threatened foreclosures on ERLY common stock 
pledged as collateral by G.D. Murphy and to stop interference by the 
plaintiff in the lawsuit, with ARI's mortgage note financing, as well as 
certain other alleged activities, including knowing participation in breaches 
of fiduciary duties, civil conspiracy with the Murphys and conversion.  The 
plaintiff recently added a claim that ERLY and ARI were alter egos of the
Murphys.  The Company and ARI believe they have valid defenses in this case 
and that damages, if any, will not have a material effect on the Company's 
financial position or results of operations; however, as with any litigation, 
the ultimate outcome is unknown.  In order to minimize legal expenses, ERLY, 
ARI, and the Murphys are using common legal counsel in this matter and have 
agreed to share legal expenses ratably.

ARI has also been named as a codefendant with Messrs. John M. Howland and 
George E. Prchal in a lawsuit filed in February 1997 in U.S. district court 
in Houston, Texas by Rice Milling & Trading Investments, LTD., an Isle of 
Man Company ("RMTI").  In 1994, ARI entered into an agreement with RMTI for 
processing the Company's rice through RMTI's facility in Jeddah, Saudi 
Arabia.  Messrs. Howland and Prchal were officers of RMTI through January 
1997 and have also been directors of ARI since October 1993 and prior to 
October 1993 were officers of ARI.  In January 1997, RMTI ceased shipping 
ARI's rice through its Jeddah facility and terminated the employment of 
Messrs. Howland and Prchal.  The lawsuit alleges among other things ARI 
failed to perform under the terms of the agreement and Messrs. Howland and 
Prchal breached their fiduciary duties to RMTI.  On April 21, 1997, the 
Company obtained a restraining order from the U.S. District Court for the
Southern District of Texas ordering RMTI to desist and refrain from purchasing
rice of U.S. or Vietnam origin from any supplier other than ARI and from
introducing and/or marketing rice of U.S. and Vietnam origin in Saudi Arabia
targeted against ARI's U.S. origin and Vietnam origin rice.  The Company 
believes that this litigation will not have a material effect on the 
Company's financial position or results of operations; however, as with 
any litigation, the ultimate outcome is unknown.

<PAGE>
  
<PAGE> 3                                



On July 24, 1997, Farmers Rice Milling Company, a Louisiana corporation
and beneficial owner of 171,933 shares of ERLY, filed a derivative complaint 
on behalf of ERLY and American Rice, Inc., against Gerald D. Murphy, 
Douglas A. Murphy, the Company and ARI in the United States District Court, 
Central District of California.  The complaint alleges among other things
that G.D. Murphy endangered ERLY and ARI by pledging ERLY stock owned
personally by him, as part of a proposed real estate development (see
above paragraph regarding the Tenzer lawsuit).  Both the Company and ARI
are nominal defendants, with the lawsuit being brought on behalf of the
Company and ARI.  The Murphys believe they have valid defenses against 
the complaint.


The Company is involved in other legal proceedings that arise in the ordinary 
course of its business, all of which are routine in nature.  Management 
believes that the resolution of such legal proceedings will not have a 
material adverse affect on the consolidated financial position or 
consolidated results of operations of the Company.
                                


<PAGE>
  
<PAGE> 4                                
                                
                                PART III


Item 10.   Directors and Executive Officers of the Company

The following is a list of the directors of ERLY Industries Inc. with 
information provided as of July 31, 1997:

                                           DATE ELECTED 
                                           AS DIRECTOR 
NAME OF DIRECTOR          AGE               OF COMPANY 

Gerald D. Murphy           69               April 1964

Mr. Murphy is Chairman of the Board and Chief Executive Officer (since 1964) 
of the Company, and is Chairman of the Board (since 1993) and Director (since 
1988) of American Rice, Inc. (which is 81% owned by ERLY).  He also serves as 
a Director of Pinkerton's, Inc., a security and investigation services firm.


Douglas A. Murphy          41               January 1988

Mr. Murphy is President (since 1990) and Chief Operating Officer (since 1992) 
of ERLY Industries Inc., President, Chief Executive Officer (since 1993) and 
Director (since 1990) of American Rice, Inc. and President of ERLY Juice Inc. 
(since 1988), a subsidiary of the Company.  He was President of Comet American
Marketing, a division of American Rice, Inc. from 1986 to 1990.  He is also a 
director advisor of Compass Bank Houston.


William H. Burgess         80               September 1975

Mr. Burgess is a private business consultant, Chairman of CMS Digital, Inc., a 
privately held company, and a Director of American Rice, Inc. (since 1988).  
From 1978 to 1986 Mr. Burgess was Chairman of International Controls Corp., 
an internationally diversified manufacturing company.  


Bill J. McFarland          60               August 1986

Mr. McFarland has served as Vice President of the Company since 1975 and as 
Director since 1986.  He has served as President of the Comet American 
Marketing division of American Rice, Inc. since 1993 and Senior Vice President
of American Rice, Inc. since 1993.  He was President of ERLY Food Group from 
1990 to 1993, President of The Beverage Source from 1979 to 1990 and President
of Early California Foods from 1975 until its sale in 1985 (all subsidiaries 
of the Company).

Alan M. Wiener             59               March 1995

Mr. Wiener has served as a Director of the Company since 1995.  He was 
President of Impulse Designs, Inc. from 1974 to 1995.  He is also a 
Director of FloTool International, Inc.  He previously served as a Director 
of Cal Fame Citrus Products, Inc. and Leisure Technology, Inc.

<PAGE>
<PAGE> 5

The following is a list of the executive officers of ERLY Industries Inc., 
their ages and their positions as of July 31, 1997:

Gerald D. Murphy     69         Chairman of the Board and Chief Executive 
                                Officer of ERLY Industries since formation of 
                                the Company in 1964 and President of the 
                                Company from 1964 to 1990; and Chairman of the 
                                Board of American Rice, Inc. (since 1993).

Douglas A. Murphy    41         President since 1990 and Chief Operating 
                                Officer since 1992 of ERLY Industries;  
                                President and Chief Executive Officer since 
                                1993 and Director since 1990 of American Rice, 
                                Inc.; President of ERLY Juice Inc. since 1988; 
                                and President of Comet American Marketing from 
                                1986 to 1990.

Bill J. McFarland    60         Vice President of the Company since 1975;  
                                President of the Comet American Marketing 
                                division of American Rice, Inc. since 1993; 
                                Senior Vice President of American Rice, Inc. 
                                since 1993; President of ERLY Food Group from 
                                1990; President of The Beverage Source from 
                                1979 to 1990; and President of Early 
                                California Foods from 1975 until its sale in 
                                1985.

Richard N. McCombs   51         Vice President and Chief Financial Officer of 
                                the Company since 1990; Executive Vice 
                                President of Finance and Administration, 
                                Secretary, Treasurer and Director of American 
                                Rice, Inc. since 1993; Managing Director of 
                                the ARI-Vinafood joint venture since 1994; 
                                President of ISC Wines of California from 1984
                                to 1986; and Executive Vice President of The 
                                Beverage Source from 1986 to 1990 and 
                                President since 1990.

Kurt A. Grey         56         Vice President of the Company since 1982; 
                                President, Cicero Industries from 1981 to 1982;
                                and Vice President, Union Bank, from 1976 to 
                                1981.

Lolan M. Pullen      63         Vice President of the Company since 1986; Vice 
                                President - Finance of the Early California
                                Foods division of American Rice, Inc. since 
                                1996; Vice President of Comet Rice, Inc. from 
                                1986 to 1993; and Vice President - Finance of 
                                Early California Foods from 1976 until its sale 
                                in 1985.

Thomas A. Whitlock   47         Vice President and Corporate Controller of 
                                the Company since 1991; Vice President and 
                                Controller of The Beverage Source from 1987 
                                to 1990; and Corporate Controller of the 
                                Company from 1981 to 1987.
<PAGE>
<PAGE> 6


Douglas A. Murphy, President of ERLY Industries Inc. and American Rice, Inc. 
is the son of Gerald D. Murphy, Chairman of the Board of the Company.  There 
are no other family relationships among the directors or executive officers 
of the Company.    




              COMPLIANCE WITH SECTION 16(a) OF THE
                 SECURITIES EXCHANGE ACT OF 1934

    
    
Executive officers and directors of the Company are required to file initial 
reports of ownership and reports of changes in ownership with the Securities 
and Exchange Commission pursuant to Section 16(a) of the Securities Exchange 
Act of 1934.  The Company has reviewed such reports received by it and 
believes that, except as specified below, all of its executive officers and
directors complied with all applicable Section 16(a) filing requirements 
during the fiscal year ended March 31, 1997.

Annual Report Form 5 to report the effect of the 10% stock dividend in the 
fiscal year ended March 31, 1997 was not timely filed for R.N. McCombs, 
and Form 4 to report a sale of stock in August 1996 was not timely filed 
by J.S. Poole.


<PAGE>
<PAGE> 7

Item 11.   Executive Compensation

The following table sets forth information for each of the three fiscal 
years ended March 31, 1997 for the Chief Executive Officer of the Company 
and the four other most highly compensated executive officers of the Company 
and its subsidiaries:

<TABLE>
<CAPTION>
                                                                  SUMMARY COMPENSATION TABLE
                                                                  --------------------------
                                                 Annual Compensation                  Long-term Compensation
                                         ----------------------------------  -------------------------------------      
                                                                                     Awards              Payouts  
                                                                             -----------------------    ----------
                              Fiscal                              Other                  Securities
                              Year                                Annual     Restricted   Underlying                All Other 
     Name and                 ended                               Compen-      Stock      Options/         LTIP      Compen- 
Principal Position           March 31    Salary($)    Bonus($)    sation($)   Awards($)    SARs(#)      Payouts($)   sation($)
------------------           --------    --------    ---------   ---------   ----------  -----------    ----------  ----------     
                                                                    (1)         (2)                       
<S>                           <C>       <C>          <C>        <C>         <C>             <C>          <C>       <C>
Gerald D. Murphy               1997      $336,000     $101,535   $ 7,542     $ 99,525          -           -        $  6,000(3)
  Chairman of the Board and    1996       325,000      100,000     6,630         -             -           -           5,609(3)
    Chief Executive Officer    1995       310,000      120,160     7,233       43,774          -           -           9,060(3)
    of ERLY Industries Inc.                           
  Chairman of the Board of
    American Rice, Inc.

Douglas A. Murphy              1997       259,000       88,665     6,784       93,225          -           -           6,000(3)
  President and Chief          1996       250,000      100,000     5,000         -             -           -           5,319(3) 
    Operating Officer of       1995       230,000       93,280     5,791       36,858          -           -           8,914(3)
    ERLY Industries Inc.
  President and Chief 
    Executive Officer of
    American Rice, Inc.

Bill J. McFarland              1997       210,000       29,325     3,893        7,425          -           -           6,000(3)
  Vice President of ERLY       1996       204,000         -        5,555         -             -           -           4,002(3)
    Industries Inc.            1995       198,000       55,400     4,075       14,263          -           -           7,500(3)
  Senior Vice President of  
    American Rice, Inc.

Thurston F. Teele              1997       206,000       85,000    10,852         -             -           -           6,000(3)
  President of Chemonics       1996       200,000      253,000     5,058         -             -           -           7,500(3)
    Industries, Inc.           1995       183,600      364,000     1,640         -             -           -           7,500(3)

Richard N. McCombs             1997       180,000         -        2,759         -            -            -           6,000(3)
  Vice President and Chief     1996       175,000       15,000       435         -          88,550         -           3,392(3)
    Financial Officer of       1995       170,000       28,560     2,418        7,347          -           -           8,106(3)
    ERLY Industries Inc.
  Executive Vice President 
    of Finance and 
    Administration of 
    American Rice, Inc.
</TABLE>                 
<PAGE>
                 
<PAGE> 8


(1)  Amounts included in this column reflect: (i) the cost of Company provided
     automobiles relating to personal use, (ii) the taxable value of life
     insurance provided by the Company, and (iii) reimbursements under the
     Company's Executive Medical Plan (the "Plan").  Under the Plan, key
     executive officers of the Company are entitled to be reimbursed for
     expenses incurred for medical and dental care provided to the key
     executive officer and his dependents which are not otherwise covered by
     other sources.

(2)  The number of shares of restricted stock and the market value thereof held
     by the executive officers listed in the table at March 31, 1997, was as
     follows:  G.D. Murphy, 11,700 shares ($99,525); D.A. Murphy, 11,300 shares
     ($93,225); B.J. McFarland, 900 shares ($7,425); Thurston F. Teele, none; 
     and, R.N. McCombs, none.  Such shares are restricted for a one-year period
     from the date of issuance.   Although no cash dividends have ever been 
     paid on ERLY common stock, dividends, if any, would be paid on restricted 
     stock at the times and in the same amounts as dividends paid to all 
     shareholders.

(3)  Amounts represent Company contributions to the ERLY Industries Inc.
     Employees Profit Sharing Retirement Plan.




<PAGE>
    
<PAGE> 9


The following table presents information on stock options held by the
executive officers named in the Compensation Table at the end of fiscal 1997. 




                 AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR 1997
                        AND MARCH 31, 1997 OPTION/SAR VALUES
                                                          
<TABLE>
<CAPTION>
                                                               Number of         
                                                               Securities                        Value of
                                                               Underlying                      Unexercised
                                                               Unexercised                     In-the-Money
                                                             Options/SARs at                  Options/SARs at
                       Shares                               March 31, 1997 (#)             March 31, 1997 ($)(1)
                     Acquired on        Value          --------------------------       --------------------------
     Name            Exercise (#)   Realized ($)       Exercisable  Unexercisable       Exercisable  Unexercisable
------------         ------------   ---------------    -----------  -------------       -----------  ------------- 
<S>                      <C>           <C>              <C>              <C>            <C>           <C>

Gerald D. Murphy           -               -                -               -                -             -   

Douglas A. Murphy          -               -              84,186            -            $394,832          -   

Bill J. McFarland          -               -              33,674            -            $157,931          - 

Thurston F. Teele          -               -                -               -                -             -   

Richard N. McCombs         -               -              88,550            -            $327,635          -      


</TABLE>


(1) Market value of underlying securities at March 31, 1997 ($8.25 per share), 
    less the exercise price.  The values in the last two columns have not been,
    and may never be, realized by the officers.  Actual gains, if any, on option
    exercises will depend on the value of the Company's common stock on the date
    of exercise. 

No options were granted to the above named executive officers during fiscal
year 1997.


<PAGE>
<PAGE> 10


                 COMPENSATION OF DIRECTORS

Members of the Board of Directors who are not officers of the 
Company receive compensation of $2,000 per quarter plus a fee of 
$1,500 for each meeting attended in person or by telephone.  In 
addition, in fiscal 1997, Mr. Burgess received fees of $22,500
for public relations services provided to the Company.  Effective
April 1, 1996, the Company will pay for outside Board members to
participate in the Company's group insurance plan for medical
benefits.


              EMPLOYMENT CONTRACTS AND TERMINATION
         OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS

The Board of Directors of American Rice, Inc. has approved an employment
agreement effective July 1997 with Mr. G.D. Murphy which provides that, 
as an employee, he shall be entitled to certain benefits for a five-year 
term commencing (i) on the date of termination, if termination is by 
notice of ARI and there has been no Change-of-Control (as defined), 
(ii) on the occurrence of a Benefits Event (as defined), following a 
Change-of-Control, if termination is at the option of Mr. Murphy, or 
(iii) on the occurrence of the last Change-of-Control preceding the 
date of termination, if termination is by notice of ARI.  Under the 
terms of the employment agreement, such benefits are provided unlesss 
termination is both, at the option of Mr. Murphy and in the absence of 
a Change-of-Control.  A Change-of-Control is deemed to occur if (i) any 
person becomes beneficial owner of 25% or more of the voting power of 
ARI or ERLY or (ii) during any consecutive years, the individuals 
comprising a majority of the Board of Directors of ARI or ERLY at the 
beginning of such period shall cease to constitute a majority.  Generally, 
benefits payable under the employment agreement include:  continuation of 
Mr. Murphy's base salary, continuation of Mr. Murphy's participation in 
profit sharing, and other executive compensations plans, various health 
care and disability plans, the right to a cash bonus in the amount of 
the bonus last received if ARI awards a cash bonus to any member of 
the Executive Group (as defined) during such five-year period, and 
indemnification for judgements, fines and expenses incurred by Mr. Murphy
by reason of his serving as an officer.  In consideration of these benefits,
Mr. Murphy has agreed not to compete with ARI or to disclose any confidential
information of ARI during the five-year period during which he is to receive 
such benefits.  If ARI or its successor fails to make timely payments as 
required by the employment agreement, liquidated damages are set at treble 
the amount of such untimely payments.  Certain amounts that may be paid 
under the employment agreement upon termination may be deemed to be 
"excess parachute payments" within the meaning of Section 280G of the 
Internal Revenue Code and, as such, would not be deductible by ARI or 
ERLY for federal income tax purposes.


<PAGE>
<PAGE> 11



                 COMPENSATION COMMITTEE INTERLOCKS
                     AND INSIDER PARTICIPATION

Decisions on the compensation of the Company's executive officers are made
by the Compensation Committee of the Board of Directors which consists of Mr. 
William H. Burgess, Chairman, Mr. Gerald D. Murphy and Mr. Alan M. Wiener.  Mr.
Burgess is a private business consultant, Chairman of CMS Digital, Inc. and a
Director of American Rice, Inc.  He is the beneficial owner of 4.1% of the
Company's common stock.  Mr. Murphy is Chairman and Chief Executive Officer of
the Company and is the beneficial owner of 30.5% of the Company's common stock.
He is also Chairman of the Board of American Rice, Inc.  Mr. Wiener is
retired and is the beneficial owner of .08% of the Company's common stock.

All decisions by the Compensation Committee were reviewed and approved
without change, by the full Board of Directors of the Company.  Committee 
members Mr. Burgess and Mr. Wiener were responsible for the determination of 
Mr. G.D. Murphy's compensation as Chief Executive Officer and Mr. Murphy did 
not participate in any Compensation Committee or Board of Directors discussions
or decisions concerning his own compensation.  Except for Mr. Murphy, who is 
the Chief Executive Officer of the Company, no other member of the Compensation
Committee is now or ever has been an officer or employee of the Company or its 
subsidiaries.  

Mr. Burgess and Mr. Murphy are also Directors of American Rice, Inc.  Both
serve on ARI's Compensation Committee of the Board of Directors, with Mr. 
Murphy as Chairman of the Committee.

Messrs. G.D. Murphy, D.A. Murphy and W.H. Burgess also serve as Directors
of American Rice, Inc.  Mr. B.J. McFarland, a Director and Vice President of
ERLY, is a Senior Vice President of American Rice, Inc.  In addition, Mr. R.N.
McCombs, Vice President and Chief Financial Officer of ERLY Industries, is a
Director and Executive Vice President of American Rice.



                     TRANSACTIONS WITH MANAGEMENT       

 
At March 17, 1997, the Company had a $1.0 million convertible promissory 
note payable to Douglas A. Murphy, President of the Company, which arose in 
April 1992.  The note was convertible at any time into ERLY Industries 
common shares at a conversion price of $2.95 per share, the average market 
price of the ERLY stock for the seven trading days immediately prior to the 
April 1, 1993 renewal of the note (as adjusted for stock dividends issued 
through October 1996).  The note was renewed on an annual basis each year 
and on April 1, 1997 Mr. Murphy again renewed the note.  The new note had an
interest rate of prime plus 2%, and was due in full on April 1, 1998.  In July
1997, Mr. Murphy converted the entire note plus accrued interest into 
351,773 shares of ERLY Industries Inc. common stock.


<PAGE>
<PAGE> 12


In April 1995, a lawsuit was filed in the district court of Harris County,
Texas by Kingwood Lakes South, L.P. and Tenzer Company, Inc., as plantiffs, 
against G.D. Murphy and D.A. Murphy, Chairman and President of the Company
and ARI, respectively.  ERLY and ARI were named as codefendants in the lawsuit
by an amendment to the original petition in September 1995.  This is a 
dispute between the general partner of a proposed real estate development and
G.D. Murphy and D.A. Murphy.  Damages sought are in the range of $10 million,
plus attorneys' fees and punitive damages.  The Company and ARI were named
as codefendants in the lawsuit because of their actions to obtain restraining
orders to prevent threatened foreclosures on ERLY common stock pledged as 
collateral by G.D. Murphy and to stop interference by the plaintiff in the
lawsuit, with ARI's mortgage note financing, as well as certain other alleged 
activities, including knowing participation in breaches of fiduciary duties,
civil conspiracy with the Murphys and conversion.  The plaintiff recently
added a claim that ERLY and ARI were alter egos of the Murphys.  The Company 
and ARI believe they have valid defenses in this case and that damages, if 
any, will not have a material effect on the Company's financial position or 
results of operations; however, as with any litigation, the ultimate outcome 
is unknown.  In order to minimize legal expenses, ERLY, ARI and the Murphys 
are using common legal counsel in this matter and have agreed to share legal 
expenses ratably.

In October 1996, the Company's subsidiary, American Rice, Inc., entered into a
new seven year lease agreement for office space in Houston, Texas with a 
limited partnership owned directly and indirectly by D.A. Murphy, President,
and G.D. Murphy, Chairman, of the Company.  ARI's annual lease expense under
the lease ranges from approximately $600,000 in the first year to 
approximately $740,000 in the seventh year, which management believes is 
comparable to, or better than, rates for similar office space in the 
proximaty.  In connection with the lease, ARI performs building management 
services in exchange for certain reductions in the lease cost.  At June 30, 
1997 ARI had an account receivable of $101,639 related to amounts paid on 
behalf of the limited partnership.
  
During the fiscal year ended March 31, 1997, Gerald D. Murphy, Chairman of 
the Company, received officer advances of $85,000 from ARI which was the 
largest amount of indebtedness outstanding to ARI during the fiscal year.  
The amount outstanding at July 31, 1997 was $44,192.  There was no interest 
charged on such advances.

<PAGE>
 

<PAGE> 13

Item 12.   Security Ownership of Certain Beneficial Owners and Management


The following table sets forth information regarding the ownership of 
the Company's Common Stock as of August 1, 1997 of (i) each person 
known to the Company to be the beneficial owner of more than five 
percent of the outstanding shares of Common Stock; (ii) each director 
and nominee for director of the Company; (iii) each executive officer 
named in the Compensation Table; and (iv) all directors and executive 
officers of the Company and its subsidiaries as a group.  Except as 
indicated, each of the stockholders has sole voting and investment 
power with respect to the shares beneficially owned by each stockholder.     


<TABLE>
<CAPTION>

      Name and address of             Amount and nature of      Percent of
       beneficial owner               beneficial ownership        class *
      --------------------            --------------------      ----------
    <S>                                <C>                       <C>
     Gerald D. Murphy, Chairman         1,587,817 shares           30.5% 
       ERLY Industries Inc.                Direct (1) and
       10990 Wilshire Blvd.                Indirect (2)
       Los Angeles, CA 90024  

     Douglas A. Murphy, President         631,252 shares           12.1%
       and Director                        Direct (3)
       ERLY Industries Inc.
       10990 Wilshire Blvd.
       Los Angeles, CA  90024

     Kennedy Capital Management, Inc.     585,518 shares           11.4%
       10829 Olive Boulevard               Direct (4)
       St. Louis, MO  63141
       
     William H. Burgess, Director         210,000 shares            4.1%
       550 Palisades Drive                 Direct
       Palm Springs, CA 92262

     Richard N. McCombs                   137,461 shares            2.6%
       Vice President and                  Direct
       Chief Financial Officer
       ERLY Industries Inc.                
       10990 Wilshire Blvd.
       Los Angeles, CA  90024

     Bill J. McFarland, Director           45,453 shares             .9%
       ERLY Industries Inc.                Direct
       10990 Wilshire Blvd.
       Los Angeles, CA  90024

     Alan M. Wiener, Director               4,009 shares            .08% 
       ERLY Industries Inc.                 Direct
       10990 Wilshire Blvd.
       Los Angeles, CA  90024

     Thurston F. Teele, President            --                      --
       Chemonics Industries, Inc.
       1133 20th Street, N.W., #600
       Washington, D.C.  20036


     All directors and executive officers    
       as a group (11 persons)          2,010,815 shares (5)       37.7% 
</TABLE>                                                           
<PAGE>
<PAGE> 14


     *    The percentages of shares held assume that options, 
          warrants or convertible notes held by the particular 
          individual, if any, have been exercised or converted, 
          and no others.

     (1)  Mr. Gerald D. Murphy, Chairman of the Board of the
          Company, is the record holder of 951,515 shares.

     (2)  Mr. Gerald D. Murphy's indirect beneficial ownership
          represents 636,302 shares owned  (1) directly by his
          son Douglas A. Murphy, President of the Company, and 
          (2) held in trust for his grandson.  Of this total,
          Gerald D. Murphy has voting control of the 5,050
          shares held in trust for his grandson, however, he
          denies holding voting or investment control of the
          balance of the 631,252 shares owned directly by his
          son, Douglas A. Murphy.

     (3)  Mr. Douglas A. Murphy, President of the Company, is
          the record holder of 547,066 shares and has the right
          to acquire an additional 84,186 shares pursuant to
          options granted under the 1982 Incentive Stock Option
          Plan.  

     (4)  Based on Schedule 13G filed February 7, 1997 with the
          Securities and Exchange Commission.  The filer is an
          investment advisor with discretionary accounts for
          investment purposes.
     
     (5)  The number of shares shown as beneficially owned by
          all directors and officers as a group includes stock
          options held by officers to purchase 213,145 shares
          of the Company's stock.



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<PAGE> 15



Item 13.   Certain Relationships and Related Transactions


See "Compensation Committee Interlocks and Insider Participation" under
Item 11.
 


Certain Business Relationships 


In conjunction with a transaction completed in May 1993, ERLY combined its
investment in its wholly owned subsidiary, Comet Rice, Inc. into American Rice,
Inc.  As a result of the transaction, ERLY increased its ownership in the
combined voting rights of ARI stock outstanding from 48% to 81%.  ERLY's
ownership in ARI consists of 777,777 shares of ARI Common Stock (each share of
which is entitled to one vote), 777,777 shares of Series A Preferred Stock 
(each share of which is entitled to one vote and is convertible into one share
of ARI Common Stock), and 2,800,000 shares of Series B Preferred Stock (each 
share of which is entitled to two votes and is convertible into two shares of 
ARI Common Stock).  Because of their positions as directors and significant 
shareholders of ERLY Industries, Messrs. G.D. Murphy, D.A. Murphy, and 
W.H. Burgess could be deemed to be the beneficial owners of the ARI stock 
owned by ERLY Industries.


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<PAGE> 17

Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K

     3.    Exhibits

    Exhibit                                                   Exhibit
    Number             Description                            Reference 

    (3)(i)  Articles of Incorporation (as amended
            September 6, 1995) (incorporated by
            reference to Exhibit 3 to the Company's
            1996 Form 10-K).

    (4)     The Indenture dated as of December 1, 1993 for
            $8,880,000 12 1/2% Subordinated Sinking Fund
            Debentures due 2002 (incorporated by reference
            to Exhibit 4 to the Company's 1994 Form 10-K).

    (4)     Trust Indenture dated August 24, 1995 by and 
            among American Rice, Inc. and U.S. Trust Company
            of Texas for $100,000,000 13% Mortgage Notes
            due 2002 (incorporated by reference to Exhibit 
            4.1 of ARI's Form S-1, file No. 33-60539).

    (10)    Form of Employment Agreement Between American
            Rice, Inc. and G.D. Murphy (incorporated by
            reference to ARI's 1997 Form 10-K/A, Amendment
            No. 1, file No. 0-17039).

    (11)    Calculation of Primary Income (Loss) Per Share.    Exhibit 11.1

    (11)    Calculation of Fully Diluted Income (Loss) Per 
            Share.                                             Exhibit 11.2

    (21)    Subsidiaries of ERLY Industries Inc.               Exhibit 21

    (27)    Financial Data Schedule (electronic filing)        Exhibit 27

    (28)    Asset Purchase Agreement dated March 23, 1993,
            between and among American Rice, Inc., Comet
            Rice, Inc. and ERLY Industries Inc.
            (incorporated by reference to Exhibit 1 to the
            Company's Form 8-K, filed June 16, 1993, File
            No. 1-7894).

    (28)    Amendment to Asset Purchase Agreement dated 
            May 25, 1993, between and among American Rice, 
            Inc., Comet Rice, Inc. and ERLY Industries Inc.
            (incorporated by reference to Exhibit 2 to the
            Company's Form 8-K, filed June 16, 1993, File
            No. 1-7894).

    (28)    Asset Purchase and Sale Agreement between American
            Rice, Inc. and Campbell Soup Company, dated as of 
            June 11, 1996 (incorporated by reference to Exhibit
            2.1 of Form 8-K, filed July 22, 1996).

    (28)    Share Sale Agreement between American Rice, Inc. 
            and Campbell Soup Company, dated as of June 11, 1996 
            (incorporated by reference to Exhibit 2.2 of Form 8-K, 
            filed July 22, 1996).

    (28)    American Rice, Inc. 1997 Annual Report and Form 
            10-K (incorporated by reference to ARI's 1997
            Form 10-K, filed June 30, 1997, file No. 0-17039).

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<PAGE> 18

                                   SIGNATURES


    Pursuant to the requirements of Section 13 or 15(d) of the Securities and 
    Exchange Act of 1934, ERLY Industries Inc. has duly caused this report to 
    be signed on its behalf by the undersigned, thereunto duly authorized.


                                ERLY INDUSTRIES INC.



                                By /s/  Gerald D. Murphy              
                                   --------------------------------------
                                  Gerald D. Murphy, Chairman of the Board
                                   (Chief Executive Officer)

                                By /s/  Thomas A. Whitlock           
                                   --------------------------------------
                                  Thomas A. Whitlock, Vice President and
                                   Corporate Controller
                                   (Chief Accounting Officer)

Dated:  August 8, 1997
----------------------