Punjab grapples with paddy paradox
In the Hindi story ‘Jamun Ka Ped’ by Krishan Chander, a hapless man’s hand is stuck under a jamun tree. Upon noticing it, authorities from various departments keep arguing with each other over who the responsibility lies with. As the man tragically suffers in pain, the red tape, the protocol and the blame game go on. Through this narrative, the author critiques the apathy, inefficiency and absurdity of government systems that overshadow human compassion and a practical solution-centric approach. In modern-day Punjab, as warehouses brim with unsold paddy and procurement grinds to a halt, farmers stand by in despair, watching promises of support fade into a cacophony of blame.
We hail from the state which has delivered the nation from a food crisis, which is why I am greatly moved by the plight of Punjab’s farmers who are caught in a crisis as out of the 180 lakh metric tonnes (MT) of last year’s rice crop produced, nearly 120 lakh MT remains in warehouses. Punjab has adopted a centralised procurement system, wherein state government agencies and the Food Corporation of India (FCI) are responsible for purchasing paddy from farmers. This procurement process is crucial to ensure that food grains are effectively stored and distributed. The Centre works with state governments and the FCI to finalise procurement estimates each year before the kharif marketing season — which runs from October to September. Within this framework, state agencies and the FCI buy paddy at the Minimum Support Price (MSP) from farmers, then mill the rice and transport it to government storage facilities nationwide. This process has become a litmus test for cooperative federalism and maintaining this balance is also vital for a buffer stock and for supporting welfare schemes under the National Food Security Act.
Under the centralised procurement system, the FCI and state agencies procure paddy for the Central pool and store it for distribution under welfare schemes. In Punjab, around 38 lakh tonnes of paddy have been procured as of October 23, significantly below the 49 lakh tonnes procured at the same time last year. Reportedly, only 10 lakh tonnes have been lifted so far. Amid labour strikes looming large, farmers gearing to hit the streets and choked mandis at every nook, the agrarian system in Punjab is crashing.
One must analyse the complex challenges as well as their clear solutions. The government’s concerns about fortified rice quality have caused delays. Fortified rice, which is rich in vitamins, is even a key component of government nutrition schemes supported by the World Bank. The issue of fortified rice stocks not adhering to levels of micronutrients haunted rice millers in August, with the FCI asking them to replace 600 stacks of fortified rice kernels. Millers estimate that a loss of one stack is a loss of Rs 10 lakh. Hybrid rice varieties require added vitamins for fortification, but the government alleges these batches do not meet required specifications, leading to slow uptake. However, rice millers argue that the supplied vitamins are substandard, further complicating procurement.
Today, the state government has been promoting the PR-126 rice variety, which requires less water and has a shorter growth period, benefiting both water conservation efforts and farmers. However, millers are hesitant to procure it, citing lower yield percentages (72 per cent compared to traditional varieties), which they argue affects profitability despite government support. Millers have voiced these concerns about the PR-126 rice variety introduced in 2016, and while they point to its quicker maturation — a mere 115 days compared to the previous 170 — and their objections reveal a deeper issue, that of reduced profit margins due to lower yields per quintal. Their resistance isn't simply limited to rice, but extends to the impact on their earnings. Instead of openly addressing these concerns, millers have resorted to discrediting the PR-126 variety, attempting to dissuade farmers from adopting it. This creates a cycle of misinformation that only serves to harm those who toil in the fields. Although this variety of rice requires less water and matures faster, millers resist its adoption, claiming lower profits due to reduced yield.
To top this, there are serious concerns around warehousing. Punjab’s warehousing falls outside the scope of the Warehousing Development and Regulatory Authority, limiting farmers' access to negotiable receipts for credit purposes. The result is a storage crunch as previous rice stocks remain unsold and new stocks pile up, creating bottlenecks within the agrarian labyrinth. At present, Punjab has 30 registered warehouses, as against 144 in a state like Madhya Pradesh. To make matters worse, the seasonal labourers from Bihar — who are essential for paddy loading — are sitting idle due to the ongoing procurement slowdown. Today, many are demanding increase in wages and threatening to leave, adding to the logistical challenges. Labourers here demand parity in wages with Haryana, which offers Rs 3.03 per quintal, while Punjab pays a meagre Rs 1.80.
The key challenges here are that of slow fund release. Of the Rs 41,000 crore cash credit limit sanctioned by the Centre, only Rs 5,600 crore has been disbursed, covering less than 15 per cent of the crop. Farmers in Punjab rightfully cite that slow procurement is affecting their ability to sow winter crops. The Centre and the Punjab Government have taken measures to facilitate smoother procurement, including online registrations, MSP payments directly to farmers’ bank accounts and plans for additional storage. However, these steps must be expanded and coordinated well. A roundtable meeting with stakeholders, including FCI, Ministry of Food Affairs, rice millers, and farmer representatives should be organised to create a fair and transparent plan for the procuring of new varieties and to ensure that fortified rice meets the market standards.
Without swift and concrete action and with empty assurances, Punjab’s farmers will continue to be at the receiving end of loss and distress even as the procurement season ends. Ensuring a holistic approach and enhanced storage capacity are essential, along with establishing fair market practices to protect farmers from fluctuating basmati prices as well as from reduced export opportunities.
In Punjab's paddy procurement crisis, the state faces unique challenges as stocks accumulate, stretching the limits of available storage. Additionally, the 2023 export ban on white rice, which once helped balance surplus stocks by moving around 3 million tonnes abroad, has compounded the procurement backlog.
Both the Central and state governments must set aside political differences and collaborate to support the agricultural sector that sustains Punjab’s economy. In this spirit, I had written to the Prime Minister on the issue of slow procurement and a piling up of stocks, debt and misery in Punjab’s warehouses.
Much like that fallen man in that story on the jamun tree, Punjab’s farmers are entangled in administrative inaction, with each side pointing fingers but doing nothing to lift him out of crisis. While governments argue over hybrid varieties and storage backlogs, the farmer drowns in despair that goes beyond the real and metaphoric seasons of sowing and reaping. Krishan Chander’s tale is a sharp reminder of what happens when a democratic state’s machinery designed by the people and for the people eclipses the interests and care of those people.
Now, Punjab's farmers wait for real solutions, not mere assurances, for decisions to change their destiny and not reflect anyone’s political aspirations. Let us hope reality does not mimic tragic fiction.
