Making of a mega paddy procurement crisis

By Harpreet Bajwa

Punjab is on the crest of a paddy procurement crisis — on a scale not witnessed in at least the last two decades. Consider this: 124 lakh metric tonnes (LMT) of milled rice is expected to arrive in government godowns from the latest Kharif crop whose procurement began on October 1, but the space available to store them at present is just 25 LMT.

Before every harvest, the procurer has to create adequate room for the safe storage of fresh arrivals by shifting the existing stock in warehouses elsewhere. For example, last year’s paddy ought to have left the warehouses in the state by June 30. That used to happen like clockwork year after year, but inexplicably didn’t this time around.

As of now, Punjab holds a whopping 114 lakh tonnes of rice in its godowns. Chief Minister Bhagwant Mann recently attributed the delay in evacuation of old stock to late milling during the last marketing season. His finance minister Harpal Singh Cheema sought to score political points by blaming it on the Centre’s “step motherly” attitude to Punjab and tardy procurement. The decibel level of political mudslinging between the AAP-led state government and the BJP defending the Centre is growing.

Why was milling of the last marketing season’s produce delayed? It was because the standard operating procedure (SOP) for delivering fortified rice to FCI godowns was firmed up by the Centre only by December last year. The SOPs included multiple quality parameters and checks. Tenders were then floated and paddy milling started in January this year. By May, the godown space crunch reared its head, so the pace of milling slowed down. Rice milling of last season’s stock was finally wrapped up only in September.

While rice millers, commission agents and farmers are blaming both the state and Central governments for the complete mismanagement, the Centre claims it has already provided a month-wise plan allocating maximum rail rakes to Punjab for expedited evacuation of the existing fortified rice stock.

Prominent agriculture expert and former Punjab Agriculture University Vice-Chancellor Sardara Singh Johl held the Central government squarely responsible for the ongoing crisis. “FCI is a Central agency. It should have lifted the stocks in a time bound manner to make space for the fresh arrivals. There can be no excuse for this delay. The state government cannot be blamed; it is just an agent of the Centre for the procurement.’’

In the eye of storm

Then there is the issue of PR-126 — a hitherto popular short-duration paddy variety promoted by the Punjab government as it consumes less water — and the cultivation of other hybrids. Millers now allege that they yield a lesser volume of rice — out-turn ratio in scientific parlance — after milling as compared to other varieties. The Food Corporation of India (FCI) mandates that 100 quintals of paddy must produce 67 quintals of rice after milling. But PR-126’s rice output has come down to 60-62 quintals, the millers allege, adding that the lower yield translates into an estimated loss of Rs 300 per quintal. While millers are wary of lifting PR-126, the question of yield could possibly be tied to the hybrids that are fraudulently sold as advanced versions of PR-126 to unsuspecting farmers.

The other knotty issues in the procurement conundrum relate to labour and commission arrangements. Labourers at the mandis (markets) are demanding higher wages on par with their counterparts in Haryana, while agents are insisting on a 2.5% commission, instead of the usual Rs 46 per quintal.

For the Kharif marketing season 2024-25, the Centre set a target of 124 LMT rice from the state, for which Punjab is expected to procure close to 185 LMT paddy by November 30. For the uninitiated, white rice is milled rice that has had its husk, bran and germ removed. Till November 16, 158 LMT paddy had arrived at the mandis, 153 LMT was procured by the state and 128 LMT lifted.

Payment to farmers

As for payment, it is seamlessly made to the farmers through direct bank transfer within 48 hours of procurement, the Union food ministry said on October 30. “The entire procurement operations have been digitized to improve efficiency, transparency and accountability which reflects the commitment of the Union government to further strengthen the MSP (minimum support price) regime,” it added.

However, farmer unions have a different take. They claim there are many farmers who sold their produce below MSP. There are others who fear that a delay in procurement could have a cascading effect on thor wheat sowing for the Rabi season, which normally begins in mid-November. Added to that are concerns over availability of fertilizers, particularly di-ammonium phosphate (DAP), accentuating farmer anxiety that is manifesting in various ways.

One such stressed out farmer, Jaswinder Singh, allegedly died by suicide in Patiala district after financial pressure from unsold paddy and a debt of approximately Rs 5 lakh, his son claimed. Another group of farmers protesting over moisture content in paddy during its auction at the Raike Kalan grain market near Bathinda allegedly held two food inspectors captive — a woman and a naib tehsildar (revenue official) — and later clashed with the police. Six persons, including three personnel, were injured and two police vehicles were damaged in the clash. The Punjab Police booked 11 activists of the Bhartiya Kisan Union (Ekta-Ugrahan) for holding three government officials hostage and attacking a police team.

The controversy over procurement also figured in the Punjab and Haryana High Court with a division bench hoping the Centre and the state would be able to thrash it out in time.

Spate of protests

The ongoing crisis led to protests by anxious farmer unions since October 1, including blockades of toll plazas on key roads, to expedite the procurement. Harvesting and procurement were delayed a bit due to heavy rainfall in September which resulted in higher moisture content in paddy, admitted Union Minister of Consumer Affairs, Food and Public Distribution Pralhad Joshi a few weeks ago.

Prem Singh Bhangu, president of the All India Kisan Federation, said since the Centre did not lift last year’s rice from godowns to create space, it gave a handle to mill owners and commissions agents for tardy purchase on the pretext of space crunch, and forced farmers to settle for less. “Rice millers who entered into an agreement with the government for milling paddy are imposing price cuts of Rs 100-200 for lifting the stock from the markets,’’ he alleged.

Bhangu claimed that a section of farmers had to sell their produce below MSP and demanded that they be adequately compensated.Balbir Singh Rajewal, president of BKU (Rajewal), saw in the lack of warehouse space a plot by both governments to discourage farmers from cultivating paddy. “It is like implementing the three repealed anti-farm laws through the back door,” he alleged.

Sarwan Singh Pandher, coordinator of the Mazdoor Sangharsh Committee (KMSC), blamed both the Centre and the state governments, saying: “Farmers have already sold their produce at a discount to the commission agents. They were not given full MSP.”

Where millers stand

Ranjit Singh Jossan, a leading rice miller and vice president of the Punjab Rice Industry Association, said their main demand is for proper FCI compensation for milling hybrid and short duration varieties as their rice output is comparatively less. This season has been particularly difficult due to the ongoing smoky weather, which has limited sunlight and resulted in paddy with moisture levels exceeding 20% flooding the local markets. In many districts, commission agents reportedly pressured mill owners to accept high-moisture paddy.

Commission agents’ take

Vijay Kalra, president of the Punjab Commission Agents Association said though paddy was brought by the farmers to the mandis a month ago, its procurement and lifting was slow. Over the weeks, the moisture level in paddy has come down to 14-15%, but millers want them at 17%, so are not lifting stocks. As for the farmers, they are blaming both the commission agents and the rice millers. “We are being squeezed from both sides for no fault of ours,” they argue. A section of the farmers hold the state government responsible as it pushed for late sowing to address concerns over groundwater depletion as paddy is a water guzzler. Earlier, paddy was sown around June 1, but now transplantation is staggered between June 11 and 20.

Procurement process

Farmers bring their produce to the market, where commission agents purchase them on behalf of the agencies, such as FCI run by the Centre, and Pungrain and Markfed, which are Punjab government entities. The Union government in consultation with all states and the FCI finalises estimates for procurement prior to the Kharif marketing season (October to September). These agencies then purchase paddy within a stipulated period for the central pool at MSP, get it milled and transport the rice to godowns in Punjab and across the country, where it is stored for maintaining buffer stock or distributed for consumption under the National Food Security Act (NFSA) and other welfare schemes.

Share in central pool

Punjab’s share in the national grain basket is humongous – over 40% wheat and close to 30% of rice each year. Since over five decades, the state has made annual procurements of about 12-13 million tonnes of wheat and rice for this pool. The procurement of paddy generally begins on October 1 with the state government taking elaborate steps to make it hassle-free at the mandis.

Similar crisis in 2000

It was in 2000 during the then SAD-BJP rule that a procurement flashpoint appeared in Punjab and farmers were up in arms. Recalling the incident, the then Punjab food and civil supplies minister Madan Mohan Mittal said, it was due to higher moisture content in paddy and discolouring. “I informed the then chief minister Parkash Singh Badal and the Centre was briefed about it. Badal and I later met the then prime minister Atal Bihari Vajpayee. The issue was resolved as the Centre announced relaxations and the whole paddy crop was lifted,’’ he said.

The problem with the bumper crop that year was that it was largely poor in quality. Since FCI had ample stock of inferior rice, its officials turned picky and said over 80% of the paddy arriving at the mandis were not good enough for procurement. Soon there was distress sale and the farming community was on the boil. The Vajpayee government had to announce a compensation package to mitigate the harvest disaster.

Three years later, another major procurement crisis erupted. Avtar Henry, who was state food and civil supplies minister during the Congress government from 2002 to 2007, said it surfaced in 2003. The then chief minister Capt Amarinder Singh led his cabinet to stage a dharna in Delhi outside the residence of then prime minister Vajpayee over the question of lack of storage space for paddy and movement of stock outside Punjab. The matter was amicably resolved. During the UPA rule in 2004, the issue of paddy discolouration came up. The then Union food supplies and consumer affairs minister Sharad Pawar sorted it out by relaxing the FCI stipulation of 67 kg rice per quintal of paddy to 66 kg. A proposal for out-of-turn ration was also approved.

Both Mittal and Henry claimed that the present government is inexperienced and does not know how to handle the situation, which is why the situation is spinning out of control.

Rejected samples

Amid the ongoing tug-of-war, a new twist has emerged as Arunachal Pradesh and Karnataka rejected the rice sent from Punjab over quality issues. Of the 26 samples of fortified rice collected by teams sent by the Ministry of Consumer Affairs, Food and Public Distribution from storage depots and fair price shops in Hubbali in Karnataka, four were declared ‘beyond rejection limit’. Earlier, 15 of the 19 samples collected from rice stocks at Banderdewa in Arunachal Pradesh — sent from Sangrur in Punjab — fell into the same ‘beyond rejection limit’ category. Three others were declared unfit for human consumption.

Besides, some 18 wagons of rice, that left Punjab’s godowns earlier this month for Dimapur in Nagaland, have been found to have “first level” of pest infestation and having less than the specified fortified rice kernels. The consignment rejected by Nagaland was reportedly dispatched from Sunam on November 4.

Prem Singh Bhangu alleged that the rejection is a calculated design of the Centre to discourage Punjab farmers from cultivating paddy. Rice purchased by the Centre remains in the custody of FCI for a long period before it is transported to other states. Therefore, farmers cannot be blamed for lack of quality, he reasoned.

Political blame game

If the state unit of the BJP accused the AAP government of failing to quickly procure paddy despite receiving Rs 44,000 crore in advance from the Centre for doing so, the AAP described it as a cheap shot. Punjab BJP spokesperson S S Channi said, “It is mainly on account of lack of preparedness, little planning and failure to make timely arrangements that the whole system collapsed.

”As for the sale of spurious seeds, it should have been dealt with by the Mann government, he said. “There’s no such issue elsewhere in the country. To address the question of spurious seeds, the Centre has already assigned the task to IIT, Kharagpur, which is conducting trials in Punjab,’’ he said.

Farmers, too, ought to share the blame for lack of godown space as they have been blocking rail movement for months together, he argued.Countering the BJP’s charges, Punjab’s Food, Civil Supplies and Consumer Affairs Minister Lal Chand Kataruchak said out of the 5,086 rice mills in the state, 4,792 have applied for allotment and 4,579 mills have already been allotted work, which is ample proof that this sixth procurement season of the AAP government would be as successful as the previous ones.

Last year, though the Union government had not paid the full cost to the farmers in the mandis, the Punjab government spent Rs 190 crore out of its own pocket to compensate them, he added. As for the lack of storage space, Kataruchak said the matter was taken up with the Centre multiple times apart from writing seven letters since March this year.

Reiterating the government’s commitment to procure every single grain of the crop brought by farmers to the mandis, he said that the chief minister is taking personal interest to ensure the protection of interests of all those connected with the procurement.

Leader of Opposition and senior Congress leader Partap Singh Bajwa accused both the BJP and the AAP of colluding to undermine Punjab’s agricultural backbone. Despite a high-profile meeting held on October 14 between Chief Minister Bhagwant Mann, Union minister Ravneet Bittu, and Union food minister Pralhad Joshi, the crisis remains unaddressed, he said.

PR gone wrong? Real culprit might be non-certified hybrid seeds

Introduced in 2016, the widely cultivated short-duration paddy variety PR-126 is now surrounded by controversy. Rice millers are reportedly refusing to accept this variety allegedly due to low post-milling output or out-turn ratio (OTR). But the real culprit might be the non-certified hybrids that seem to have flooded the market.

With paddy being extremely water-intensive and the state facing a severe groundwater crisis, the PAU in 2016 introduced PR-126 that promised a short growth span, minimal pesticide requirement and excellent OTR — over 30 quintals per acre. Soon, it became the go-to variety for farmers.

In 2023-24 and 2024-25, non-Basmati paddy was sown in about 32 lakh hectares across the state. Of the 32 lakh hectares, PR-126 was cultivated in approximately 8.59 lakh hectares last year, which works out to about 33% of the total area. PR-126’s share in paddy cultivation area is expected to have touched 44% this year.

Prior to PR-126, farmers had opted for PR-121 in the districts of SAS Nagar, Hoshiarpur and Pathankot but then dropped it after a virus attack.

A PAU study commissioned by the state government in the wake of protests by millers over the inexplicable drop in PR-126 rice yield, revealed that hybrids were illegally sold as PR-126 to gullible farmers.

The study found that the full grain yield percentage of some of the hybrids was as low as 40%. Besides, they had varied degrees of grain breakage.

Before the paddy sowing season began in May, millers had no problem with PR-126. While PR-126 is a PAU product, the hybrids are created by private companies and are neither recommended nor tested or certified by the university.

Farmers who sowed hybrid varieties said they purchased the seeds from either commission agents or seed and pesticide dealers. The state government has since directed rice mills to stock PR-126 and hybrid paddy separately, so that milling trials can be easily carried out to determine their actual yield.

PAU Vice-Chancellor Dr S S Gosal had earlier said complaints of lower yield of PR-126 came up only in the last two seasons as some seed dealers sold hybrids, falsely claiming they were an improved version of PR-126. He emphasised that the PAU hasn’t released any hybrid variety of PR-126.

This article has been republished from The New Indian Express