Time to Sort Out India’s Cereal Mess

UPSC Syllabus Topic: GS paper 3- Indian economy- issues of buffer stocks and food security

Introduction

India’s foodgrain policy is facing growing contradictions. While the country has excessive stocks of rice and wheat, it is dependent on imports for pulses and edible oils, spending huge amounts on food subsidies and foreign purchases. The recent controversy over paddy procurement in Tamil Nadu’s kuruvai season shows how India’s procurement and cropping system has become distorted. It underlines the urgent need to reform the procurement, crop diversification, and food security policy. Time to Sort Out India’s Cereal Mess.

Key Facts Behind India’s Cereal Mess

1. Across India, paddy procurement (as rice) was 119.86 lakh tonnes by October 31, 2025, against 82.08 lakh tonnes a year earlier.
2. Rice stocks now stand at 356.1 lakh tonnes against a norm of 102.5 lakh tonnes.

3.Subsidy burden: The Union government spends about ₹2 lakh crore each year on food subsidy.

4. India is the largest producer of pulses at 252.4 lakh tonnes in 2024-25, yet it imports pulses worth ₹30,000 crore and edible oil worth ₹1.2 lakh crore, with about 55% of edible oil demand met through imports.

Cause of India’s Cereal Mess

1. Assured support for paddy: Paddy offers minimum assured returns and easy procurement. Farmers shift more land to paddy when other crops look risky, which keeps adding to large rice stocks.
2. Limited comfort in pulses and oilseeds: Pulses and oilseeds do not enjoy the same backing. Procurement of notified pulses at MSP has fallen, so farmers feel less secure growing them.
3. Cheap edible oil imports: Cheaper edible oil imports weakened domestic oilseed prices. Output has lagged behind demand because policy support here stays weaker than for rice and wheat.
4. Procurement–PDS imbalance: Rice procurement is 525–547 lakh tonnes, while PDS distribution is 392–427 lakh tonnes. Buying more than needed creates surplus stocks and higher costs, even while India imports pulses and edible oil.
5. System inefficient: ICRIER study estimating about 28% loss of rice and wheat in distribution, showing that the system is still not efficient.

Consequences

1. Nutritional Deficiencies: A cereal-heavy diet with inadequate protein and micronutrients is linked to rising lifestyle diseases like diabetes and obesity.
2. Price Volatility: Despite the overall surplus, India has experienced high cereal inflation, raising questions about the accuracy of production data and market dynamics.
3. Resource Misallocation: Continued overinvestment in certain cereal production, particularly water-intensive crops like rice in water-stressed regions, raises sustainability concerns.

Way forward

1. Crop diversification: India should consider diversifying agriculture away from just rice and wheat.
2. Financial support: Farmers need financial support and guidance to reduce their fear of switching crops and to manage the risk of trying new crops.
3. Export relaxation: Since rice production already exceeds national needs, export restrictions should be relaxed so that farmers can benefit from global markets instead of facing sudden curbs.

4.,Investigate and potentially expand cereals’ industrial applications, considering the speculated rise in use for products like beer and biscuits.

5. Direct link between farmers and buyers: Primary producers should be helped to tie up directly with buyers, such as papad manufacturers with blackgram farmers, so that both sides gain better prices and stable supply.
6. Strengthening Farmer Producer Organisations (FPOs):

• Farmers should be encouraged to form and join FPOs so that they can bargain better, organise supplies, and build long-term market linkages.
• FPOs, self-help groups and cooperative societies can share paddy procurement work, as seen in West Bengal, and reduce the load on existing procurement agencies.
• FPOs can be used to educate farmers on soil health, guide them towards crop diversification, prepare market studies, and help set up supply chains in different regions.

7. Plugging leakages and reforming the system: The government should examine leakages and weaknesses in the PDS and procurement system and work with farmers, experts and policy makers to plug loopholes and move towards wider reform.

Conclusion

India’s current foodgrain system is imbalanced and unsustainable. It rewards overproduction of rice and wheat while neglecting vital crops like pulses and oilseeds. To fix this, India must redesign its procurement system, incentivise diversification, and empower FPOs and cooperatives. Such reforms require joint efforts by farmers, policymakers, and experts. Though gradual, these steps are essential to build a balanced, self-reliant, and sustainable agricultural future.

Question for practice

Examine the causes of India’s cereal mess and what should be done to address it.

Source: The Hindu