Overview of the Paddy Procurement System and Challenges

The recent controversy in Tamil Nadu over paddy procurement during the kuruvai season highlights the need to reassess the foodgrain procurement system in India. The Tamil Nadu Civil Supplies Corporation (TNCSC) faces issues like time overruns and corruption. An increase in paddy cultivation, due to perceived reliable returns, exacerbates the problem.

National Procurement Data and Stock Levels

• The Union Ministry of Consumer Affairs, Food and Public Distribution reports that paddy procurement nationwide reached approximately 119.86 lakh tonnes by October 31, 2025, compared to 82.08 lakh tonnes the previous year.
• As of October 1, the quarterly opening stock of rice and wheat has consistently been higher than the norms for the central pool. For rice, the current stocks are about two times the required amount.
• The stock of rice in October was 356.1 lakh tonnes against a norm of 102.5 lakh tonnes.

Procurement vs. Utilization

• Between April 2022 and March 2025, rice procurement hovered between 525 lakh tonnes and 547 lakh tonnes annually, while offtake under PDS ranged from 392 lakh tonnes to 427 lakh tonnes.
• For wheat, PDS utilization exceeded procurement in two out of the last three years, except 2024-25.

Financial Implications and Import Challenges

• The Union government spends around ₹2 lakh crore annually on food subsidies.
• India is the largest producer of pulses, yet significant imports are necessary to meet demand, leading to import costs of ₹30,000 crore for pulses and ₹1.2 lakh crore for edible oils in 2023-24.
• The Russia-Ukraine conflict has increased edible oil import costs, despite stable import quantities over the past six years.

Sustainability and Diversification Challenges

The focus on rice cultivation raises questions about sustainability and crop rotation. Efforts to boost pulse and oilseed production have not matched the success seen in paddy and wheat 55 years ago. Also, the existing procurement model and its execution need reconsideration.

Addressing System Inefficiencies

• The PDS faces issues, including a reported 28% loss of rice and wheat during distribution, according to the Indian Council for Research on International Economic Relations (ICRIER).
• Encouraging paddy farmers to diversify can be achieved with market studies and support, but farmers need financial support and guidance to ensure successful crop transitions.

Recommendations for Improvement

• Allow farmers to export rice freely to manage surplus, avoiding reactionary restrictions.
• Enhance direct ties between producers and suppliers, such as through Farmers Producers’ Organisations (FPOs), to streamline supply chains and increase profits.
• FPOs, although in their nascent stage, can be instrumental in educating farmers on soil health, promoting diversification, and improving procurement processes.
• Encourage self-help groups and cooperative societies, covering them under capacity building initiatives.

In conclusion, agriculture experts, farmers, policy makers, and food security specialists must collaborate to reform the procurement system and address inefficiencies.