(GS Paper III – Agriculture, Food Security, MSP, PDS Reforms)
Context (Introduction)
India faces a paradox: record paddy procurement and overflowing rice stocks far above buffer norms, even as the country spends heavily on importing pulses and edible oils. The Tamil Nadu procurement controversy reflects deeper structural flaws in India’s cereal-centric policy regime.
Main Arguments
- Excess procurement and rising stocks: Rice stocks in the central pool on Oct 1, 2025 stood at 356.1 lakh tonnes, over 3.5 times the required norm (102.5 lakh tonnes). Annual rice procurement remains high at 525–547 lakh tonnes, while PDS offtake remains lower (392–427 lakh tonnes).
- MSP-driven skew towards paddy: Farmers increasingly shift to paddy due to minimum assured returns, as seen in Tamil Nadu’s kuruvai season expansion by 2 lakh acres. This creates procurement pressure and disincentivises diversification.
- Import dependence despite domestic capacity: India imports ₹1.2 lakh crore of edible oils and ₹30,000 crore of pulses, even though it is the world’s largest pulses producer (252.4 lakh tonnes, 2024–25). Oilseed production has stagnated around 400 lakh tonnes only once since 2014.
- Mismatch between procurement and consumption: While rice is over-procured, wheat shows the opposite trend: PDS utilisation exceeded procurement in two of the last three years. This highlights lack of dynamic, crop-wise planning.
- High fiscal cost with systemic leakages: The food subsidy bill remains around ₹2 lakh crore annually, yet leakage continues. An ICRIER study reported ~28% loss of rice and wheat during distribution — highlighting inefficiencies in PDS and procurement.
Criticisms / Drawbacks
- Unsustainable cereal-heavy procurement: Over-dependence on rice procurement crowds out essential nutritional crops, contradicting the broader goals of food security and nutrition security.
- Disincentivisation of crop rotation and diversification: Paddy dominance erodes soil health, depletes groundwater, and discourages pulses/oilseeds that are crucial for dietary diversity.
- Ineffective MSP operations for pulses and oilseeds: Despite high production, procurement of notified pulses has fallen substantially over the last two years, signalling weak support systems unlike for paddy/wheat.
- Structural inefficiencies in FCI and State corporations: Time overruns, potential corruption, and poor coordination—as seen in TNCSC—reflect broader weaknesses in centralised procurement, storage, and transport systems.
- Weak institutional mechanisms for market integration: FPOs remain nascent, and farmers lack secure linkages with processors (e.g., blackgram growers and papad makers). Fragmented value chains worsen farmer uncertainty.
Suggested Reforms
- Incentivise Crop Diversification
- Conduct area-specific demand–supply market studies to guide farmers.
- Provide financial support, crop-specific advisories, and risk mitigation tools.
- Replicate models from Punjab-Haryana diversification pilots and Telangana’s oilseed push.
- Rationalise Procurement Policies
- Introduce flexible procurement ceilings based on nutritional needs and buffer norms.
- Revisit MSP coverage to include more pulses and oilseeds under assured procurement.
- Permit unrestricted rice exports, avoiding ad hoc bans that depress farmer incomes.
- Strengthen Farmer–Market Linkages
- Encourage FPO–processor partnerships; e.g., blackgram growers–papad units.
- Promote contract farming frameworks with safeguards to reduce intermediaries.
- Expand FPO capacity in procurement (e.g., West Bengal’s successful use of FPOs in paddy procurement).
- Reform PDS and Reduce Leakages
- Digitise end-to-end supply chains (e-NAM–PDS linkage, GPS tracking).
- Expand portability under One Nation One Ration Card (ONORC).
- Adopt community monitoring and SHG-led distribution in vulnerable districts.
- Boost Oilseed and Pulse Productivity
- Expand area under NFSM-Oilseeds & Pulses, promote HYVs and water-saving technologies.
- Invest in R&D: India has stagnant yields (around 1 tonne/ha for oilseeds).
- Incentivise private sector in processing and storage for value addition.
Conclusion
India’s cereal policy, designed six decades ago to address scarcity, is misaligned with today’s nutritional, environmental, and fiscal realities. Rebalancing procurement towards pulses and oilseeds, empowering FPOs, enabling freer markets, and modernising PDS can transform this paradox into an opportunity—ensuring both food security and farmer security in a sustainable manner.
Mains Question
- India’s foodgrain procurement system has created a cereal-heavy imbalance. Analyse the structural reasons for this paradox and suggest necessary reforms.(250 words, 15 marks)
Source: The Hindu