Punjab’s paddy procurement challenges: Farmers bear the brunt......by KBS Sidhu

How Weather Disasters and Policy Decisions Wiped Out Rs 4,000–5,000 Crore in Farmer Income During the Kharif 2025 Paddy Season.

Punjab’s Agrarian Slowdown in Kharif 2025

Once hailed as India’s “breadbasket,” Punjab now finds its paddy procurement—the backbone of its rural economy—at the lowest level in nearly a decade. Despite successive increases in the Minimum Support Price (MSP), a combination of floods, crop diseases, and poorly timed policy decisions has eroded farmer incomes. Compared to the 2022–2024 seasons, Punjab’s farmers in the Kharif 2025 season have collectively lost between Rs 4,185 crore and Rs 5,390 crore—an average of about Rs 5,000 per farmer per annum—marking a staggering decline in rural earnings.

Decoding the Numbers: Procurement and Income Trends

Over four years, Punjab’s paddy procurement has declined sharply, with the following seasonal figures:

• 2022–23: 186.11 LMT procured; MSP Rs 2,040/quintal; total value ~Rs 37,966 crore.
• 2023–24: 185.28 LMT procured; MSP Rs 2,225/quintal; total value ~Rs 41,225 crore.
• 2024–25: 172.5 LMT procured; MSP Rs 2,320/quintal; total value ~Rs 40,020 crore.
• 2025–26 (expected): 150 LMT procured; MSP Rs 2,389/quintal; total value ~Rs 35,835 crore.

Procurement has fallen by nearly 36 LMT from the 2023–24 peak. Even with a 3% MSP rise, the incremental benefit of Rs 1,035 crore has been more than offset by the loss in output. Year-on-year income losses now stand at Rs 4,185 crore from 2024–25 and Rs 5,390 crore compared to the 2023–24 record year.

When Nature and Policy Collided

Punjab’s current crisis is not a single-season anomaly—it is the cumulative result of overlapping ecological and administrative missteps.

1. Floods and Excess Rainfall

In August–September 2025, Punjab witnessed its worst flooding in four decades. Over 3.47 lakh acres of paddy fields were inundated, particularly in the border districts of Gurdaspur, Fazilka, and Ferozepur. Early sown varieties were destroyed, harvests delayed, and grain quality severely compromised.

2. Ill-Timed, Ill-Advised Policy Shift

In a bid to conserve groundwater, the state—on the advice of agricultural technocrats—delayed the paddy sowing window from mid-June to 1 July. The change proved counterproductive: flowering coincided with the heaviest monsoon rains, causing poor pollination and irreversible yield losses.

3. Crop Disease Outbreak

Post-flooding, the state saw widespread attacks of Southern Rice Black-Streaked Dwarf Virus (SRBSDV) and false smut (“haldi rog”). High moisture levels produced discoloured grain, much of which failed to meet procurement standards.

4. Yield Drop

Punjab’s average paddy yield fell from 27–32 quintals/acre to 22–25 quintals/acre, a 10–15% decline. Nearly five lakh acres saw total crop failure, particularly devastating for tenant farmers and smallholders.

Procurement Operations: Damaged but Functional

Despite the catastrophe, the state’s procurement system demonstrated resilience. By late October 2025, arrivals crossed 100 LMT, with 97 LMT procured through 1,822 mandis. Procurement began earlier—on September 16—to mitigate moisture issues and stagger market arrivals.

• Rs 21,000 crore was credited to farmers by mid-October.
• Cash Credit Limits (CCL) were sanctioned promptly to ensure timely payments.
• Relaxed quality standards allowed damaged but salvageable paddy to be accepted.

However, storage bottlenecks persisted as rice millers refused to lift high-moisture stocks, delaying transport and payments.

The Farmer’s Story: Income Erosion and Debt

The numbers translate into grim ground realities. Surveys show farmers earning Rs 16,000–20,000 less per acre than last year. The Rs 69/quintal MSP increase barely cushioned the fall.

• Talwinder Singh (Jalandhar): Yield fell from 31–32 to 22–23 quintals/acre. His per-acre income dropped from Rs 74,000 to Rs 55,000, leaving negligible profit after rent and input costs.
• Devinder Singh (Tarn Taran): Yield of 22 quintals/acre led to losses exceeding Rs 19,000 per acre compared to earlier years.

The Punjab Government’s Rs 20,000/acre compensation only covers fully damaged plots, leaving partially affected farmers—often the majority—struggling to service crop loans.

Ripple Effects Across Punjab’s Rural Economy

Falling procurement ripples across Punjab’s agrarian ecosystem. Commission agents, labourers, transporters, and millers all face reduced earnings. The Punjab Agriculture Minister aptly noted that “lesser procurement means less cash in the hands of farmers”—a double blow of natural and economic distress.

With reduced market turnover, the state’s revenue from procurement levies and fees also shrinks. Given its 44.5% debt-to-GSDP ratio, Punjab has little fiscal scope to expand relief measures beyond existing commitments.

National Perspective: Impact on Food Security

Punjab’s contribution to India’s central rice pool has fallen from 170–175 LMT to 150 LMT. Fortunately, other major producers such as Chhattisgarh, Odisha, and Telangana have stepped up procurement, ensuring that national buffer stocks remain adequate. Nevertheless, Punjab’s declining role raises longer-term concerns about regional imbalances in food security.

Lessons from the Crisis

MSP Alone Cannot Save Farmers

The modest 2.97% MSP increase for 2025–26 translated into Rs 1,035 crore in additional earnings—far below the Rs 4,000–5,000 crore wiped out by lower procurement. The crisis reaffirms that price hikes cannot substitute for stable yields and consistent volumes.

Volume Trumps Value

Punjab’s experience underscores a critical truth: output, not price, defines rural prosperity. Even generous MSP regimes fail when climatic volatility and policy missteps cut into the crop base.

The Road Ahead: Adaptation and Reform

As the rabi season begins, Punjab faces an urgent need for climate-resilient practices, crop diversification, and flexible procurement norms during disaster years. Expanding crop insurance coverage and investing in drainage and disease-resistant seed varieties are essential to mitigate future shocks.

The 2025–26 paddy season will be remembered not for its MSP hike, but for its harsh reminder that agricultural stability demands more than price guarantees—it requires foresight, coordination, and respect for nature’s cycles.

November 1, 2025