Punjab is India’s largest source of rice for PDS. A severe storage crunch there leading to delayed procurement of the current harvest is distortionary. The immediate solution is to quickly move rice procured last year from Punjab’s godowns while hiring more storage space. The long-term solution is to find ways to push some farmers in Punjab and Haryana into crops other than paddy
Punjab is so central to Indian agriculture’s landscape that it continues to make headlines both in times of shortages and surpluses.
In 2022-23, India procured only 18 million tonnes of wheat down from 43.3 million tonnes in 2021-22. It was Punjab which contributed 9.45 million tonnes, about half of India’s total procurement. So, it is really a tough time for Punjab’s paddy farmers when they find that their paddy cannot be procured due to shortage of storage capacity.
Mechanics of rice procurements
In Punjab, paddy is mainly procured by state government agencies. It is then handed over to shellers for milling into rice. Once the rice is ready, state agencies take its delivery on paper and hand it over to FCI for storage. The FCI stores it in its own or hired warehouses. The rice is then moved by FCI to the consuming states where it is stored in FCI warehouses and then handed over to state governments for distribution under the public distribution system.
The storage space in Punjab is created by moving rice out of Punjab. FCI has to issue the rice within two years of taking delivery from state agencies. So, the outward movement of rice before the next Kharif Marketing Season (October - September) is critical to creating storage in Punjab.
© Copyright 2025 The SSResource Media.
All rights reserved.