Context

• The recent controversy over paddy procurement during Tamil Nadu’s short-term kuruvai season has underscored the need to critically re-examine India’s overall foodgrain procurement system.
• The Tamil Nadu Civil Supplies Corporation (TNCSC), which procures paddy on behalf of the Food Corporation of India (FCI), faced delays, administrative gaps, and allegations of corruption, problems intensified by a predictable rise of nearly two lakh acres in paddy cultivation.
• The issue reflects a broader national pattern: farmers increasingly find paddy a safe bet due to assured returns through procurement, raising questions about the long-term sustainability of such incentives.

Paddy Procurement Data

• The glut is not confined to Tamil Nadu. Nationwide, paddy procurement (as rice) reached 119.86 lakh tonnes by October 31, 2025, a sharp rise from 82.08 lakh tonnes the previous year.
• Central pool stocks for rice and wheat have consistently exceeded mandated norms over the last three years.
• Rice stocks alone stood at 356.1 lakh tonnes in October 2025, more than triple the norm of 102.5 lakh tonnes.
• While wheat stocks fluctuate more closely with actual consumption needs, rice has remained consistently oversupplied.
• Between 2022 and 2025, annual rice procurement held steady at 525–547 lakh tonnes, whereas offtake under the National Food Security Act (NFSA) remained much lower at 392–427 lakh tonnes.
• In contrast, PDS utilisation for wheat exceeded procurement in two of the last three years.
• Despite these mismatches, the Union government allocates around ₹2 lakh crore annually in food subsidies.
• This rising surplus in rice contrasts sharply with shortages of other essential commodities such as pulses and oilseeds, highlighting structural imbalances in crop production and procurement priorities.

Edible Oil Imports

• India’s dependence on imports for pulses and edible oils is persistent and costly.
• According to the Agriculture Ministry’s 2024–25 report, India imported ₹1.2 lakh crore worth of edible oil and ₹30,000 crore of pulses in 2023–24. Nearly 55% of edible oil needs are met through imports.
• Global disruptions, especially from the Russia–Ukraine conflict, sharply increased import costs, even though the imported quantities remained within 135–157 lakh tonnes annually over the past six years.
• Domestic oilseed production has stagnated despite steady cultivation area. Since 2014, annual production has crossed 400 lakh tonnes only once, raising concerns about the long-term viability of the sector.

Systemic Questions Raised

• This situation raises several pressing questions. First, is India’s rice procurement policy, justified historically for food security, still sustainable when stocks are far above requirement?
• Excessive emphasis on paddy encourages monoculture, undermines soil health, and worsens water scarcity, especially in regions like Punjab and Tamil Nadu.
• Second, why have policy efforts to strengthen pulses and oilseed production yielded limited results, failing to replicate the success of the 1960s Green Revolution?
• Third, should the country continue with the centralised model of procurement, storage, and transport by agencies like FCI, despite growing inefficiencies?

Leakages and Inefficiencies in the Public Distribution System

• Reports such as the one by the Indian Council for Research on International Economic Relations (ICRIER) have highlighted leakage rates of nearly 28% in rice and wheat.
• Although authorities contest such findings, there is broad consensus that the PDS still suffers from diversion, identification errors, and logistical inefficiencies.
• Originally intended to manage food shortages, the PDS has evolved into a vast welfare mechanism, but one that remains vulnerable to systemic gaps.

Crop Diversification as a Strategic Imperative

• In light of these challenges, crop diversification emerges as a critical pathway forward.
• However, farmers’ hesitation to diversify is rooted in real concerns: market risks, uncertain returns, and inadequate institutional support.
• Overcoming such resistance requires a combination of:
  • Area-specific market studies
  • Financial incentives and transitional support
  • Reliable procurement mechanisms for alternative crops
  • Technical guidance and risk-mitigation strategies
• Given India’s rice surplus, enabling free export of rice, rather than imposing sudden restrictions, would help stabilise domestic prices and offer farmers more flexibility.

Strengthening Farmer-Centric Institutions: FPOs, SHGs, and Cooperatives

• A promising avenue for reform lies in empowering Farmer Producer Organisations (FPOs), self-help groups, and cooperative societies.
• These institutions can bridge the gap between farmers and markets, reduce reliance on middlemen, and improve supply chain organisation.
• Currently, FPOs are still emerging, but their potential is considerable:
  • They can facilitate direct linkages between farmers and industries (e.g., papad manufacturers sourcing blackgram directly).
  • They can provide crucial services such as soil health awareness and crop diversification training.
  • They can take up procurement functions, as seen in West Bengal’s use of FPOs for paddy procurement.

Conclusion

• The Tamil Nadu paddy procurement controversy is not an isolated administrative lapse but a reflection of deeper structural imbalances, overproduction of rice, inadequate diversification, heavy import dependence for essential foods, and mounting fiscal burdens.
• Collaborative efforts involving farmers, agricultural scientists, food security experts, and policymakers are essential to redesign a system that is financially prudent, environmentally sustainable, and nutritionally balanced.
• Only through such a collective and forward-looking approach can India ensure that its food security strategy remains robust, equitable, and sustainable in the decades to come.