15 Dec 2025
The recent controversy in Tamil Nadu over delays and alleged irregularities in paddy procurement during the short-term kuruvai season has once again underscored the need for a comprehensive review of India’s foodgrain procurement system. The episode, involving the Tamil Nadu Civil Supplies Corporation (TNCSC), which procures paddy on behalf of the Food Corporation of India (FCI), highlights systemic issues that are evident across several States.
In Tamil Nadu, procurement agencies were caught unprepared due to time overruns and allegations of corruption, partly attributed to a sharp expansion in paddy acreage during the season. The area under cultivation reportedly increased by nearly two lakh acres, a development that was known as early as mid-August. Farmers, encouraged by minimum assured returns under the procurement regime, increasingly view paddy as a safer choice than alternative crops.
Rising Procurement, Swelling Stocks
The glut in paddy procurement is not limited to Tamil Nadu. Data from the Union Ministry of Consumer Affairs, Food and Public Distribution show that nationwide paddy procurement, measured in rice equivalent, stood at 119.86 lakh tonnes as of October 31, 2025, sharply higher than 82.08 lakh tonnes on the same date last year.
Over the past three years, opening stocks of rice and wheat in the central pool as of October 1 have consistently exceeded prescribed buffer norms. In the case of rice, stocks have been at least double the required levels. As of October this year, rice stocks were estimated at 356.1 lakh tonnes, far above the norm of 102.5 lakh tonnes.
Compared with wheat, rice availability remains far more comfortable. Between April 2022 and March 2025, all-India rice procurement ranged from 525 lakh tonnes to 547 lakh tonnes annually, while offtake under the Public Distribution System (PDS) was significantly lower, between 392 lakh tonnes and 427 lakh tonnes. In contrast, wheat utilisation under the PDS exceeded procurement in two of the last three years, excluding 2024–25.
Despite these imbalances, the Union government continues to spend nearly ₹2 lakh crore annually on food subsidies, raising questions about the efficiency and sustainability of the current system.
Imports Amid Domestic Surpluses
The paradox becomes sharper when viewed alongside India’s dependence on imports for pulses and edible oils—two staples central to Indian diets. While the country struggles with surplus rice stocks, it incurs substantial expenditure on importing these commodities.
According to the Ministry of Agriculture and Farmers Welfare’s 2024–25 annual report, India imported edible oils worth ₹1.2 lakh crore and pulses worth ₹30,000 crore during 2023–24. About 55% of domestic edible oil demand is met through imports. Although India is the world’s largest producer of pulses, with output estimated at 252.4 lakh tonnes in 2024–25, procurement of notified pulses at minimum support prices has declined sharply since 2023–24.
Geopolitical factors, including the Russia–Ukraine conflict, have contributed to the surge in edible oil import costs, which rose from about ₹82,000 crore in 2020–21 to much higher levels, even though import volumes have remained broadly stable at 135–157 lakh tonnes annually over the past six years.
Meanwhile, domestic oilseed production has shown little dynamism. Since 2014, output has crossed the 400-lakh-tonne mark only once, despite the cultivated area remaining steady at around 25 million hectares. For decades, analysts have pointed to liberal imports of cheaper edible oils in the 1990s as a key factor undermining domestic oilseed production, yet corrective policy responses have been limited.
Rethinking Food Security and Procurement
These trends raise fundamental questions about the sustainability of India’s food security strategy, particularly with respect to rice procurement. Is the current system inadvertently encouraging excessive paddy cultivation at the cost of crop rotation and diversification? Why have efforts to boost pulse and oilseed production not matched the success achieved in rice and wheat since the Green Revolution? And does India need to persist with a highly centralised procurement, storage and distribution framework involving multiple agencies?
Concerns over inefficiencies persist. While authorities have pushed back against studies highlighting leakages in the PDS—such as an ICRIER report estimating losses of nearly 28% in rice and wheat distribution—the system’s imperfections are widely acknowledged.
Incentivising Crop Diversification
Addressing these structural challenges requires a calibrated shift towards crop diversification. Farmers’ reluctance to move away from paddy stems largely from uncertainty over returns and market access for alternative crops. This can be mitigated through targeted financial incentives, assured procurement mechanisms and robust extension support, guided by area-specific demand and supply assessments.
Given the surplus in rice production, policy should also move towards a more predictable export regime, allowing farmers to benefit from global markets rather than imposing abrupt restrictions.
Stronger linkages between farmers and end-users can also play a role. Direct tie-ups—for instance, between pulse growers and food processors such as papad manufacturers—could create mutually beneficial outcomes. Organising farmers into Farmer Producer Organisations (FPOs) would enhance bargaining power, improve market access and ensure more durable supply chains.
Strengthening Institutions
Although FPOs remain at a nascent stage, their potential is significant. Beyond procurement, they can support soil health management, promote diversification, assist in market studies and help build efficient supply chains. States such as West Bengal have already demonstrated how FPOs can be integrated into paddy procurement to ease pressure on existing agencies. Self-help groups and cooperative societies can also be leveraged, provided they are supported through structured capacity-building programmes.
Reforming a system of this scale will inevitably take time. However, a meaningful beginning can be made through informed dialogue and coordinated action. It is imperative that agriculture experts, farmers, food security specialists, policymakers and planners come together to identify and address systemic gaps—if not to overhaul the framework, then at least to make it more balanced, efficient and sustainable.