Grading of rice grains has gain attentions due its requirement of quality assessment during import or export. Rice grain quality depends on milling operation, where rice hull is removed with a huller system followed by whitening operation. In such process, adjustment of rollers, control, and operation is important in terms of quality of milled rice. Especially, the basmati rice needed more quality assurance as it is not parboiled rice and exported globally with a high product value. In this present work, the basic problem of quality assessment in rice industry is addressed with digital image processing based technique. Machine vision and digital image processing provide an alternative with the automated, nondestructive, cost-effective, and fast approach as compared with traditional method which is done manually by human inspectors. A model of quality grade testing and identification is built based on morphological features using digital image processing and knowledge based adaptive neuro-fuzzy inference system (ANFIS). The qualities of rice kernels are determined with the help of shape descriptors and geometric features using the sample images of milled rice. The adopted technique has been tested on a sufficient number of training images of basmati rice grain. The proposed method gives a promising result in an evaluation of rice quality with 100% classification accuracy for broken and whole grain. The milling efficiency is also assessed using the ratio between head rice and broken rice percentage and it is 77.27% for the test sample. The overall results of the adopted methodology are promising in terms of classification accuracy and efficiency.