Telangana’s slow paddy procurement raises concerns over foodgrain buffer and fine rice prices

Hyderabad: With millers and private traders from Telangana and neighbouring States buying paddy directly from farmers, slow paddy procurement by the Congress government is posing a threat to its efforts to build a 14-month foodgrain buffer amid the El Niño crisis. Even as October nears its end, fewer than 2,000 of the 8,283 planned paddy procurement centres have opened so far.

Soon after harvesting began earlier this month, millers and traders from Maharashtra, Karnataka and Andhra Pradesh joined local buyers in purchasing paddy directly from farmers. Anticipating demand for fine rice varieties amid concerns over El Niño’s impact on production, they are offering Rs 3,100 to Rs 3,700 per quintal for fine variety paddy, with prices in several areas exceeding the minimum support price.

At the Kesamudram Agricultural Market in Mahabubabad district on Monday, the Jai Sriram variety reportedly fetched a record Rs 5,016 per quintal. Fine paddy varieties are also commanding Rs 3,100 to Rs 3,700 per quintal in districts such as Nalgonda, Karimnagar, Nizamabad and Khammam.

Private buyers are purchasing freshly harvested paddy at farm fields, sparing farmers the expense of drying and transporting it. Farmers are attracted by immediate payments and the opportunity to avoid transportation costs and delays associated with government procurement. The diversion could concentrate supplies with private millers and traders, increasing the risk of higher retail prices if availability tightens.

The States government announced plans to procure 65 lakh tonnes of paddy this season and maintain a 14-month foodgrain buffer, but the target appears difficult to achieve at the current pace. In Nizamabad, against an estimated crop of 12 lakh tonnes and a procurement target of 6.5 lakh tonnes, officials are unsure whether government purchases will reach four lakh tonnes. In Nalgonda, procurement is expected to reach only two to three lakh tonnes against a target of 4.5 lakh tonnes.

Telangana requires around 2.38 lakh tonnes of fine rice every month towards public distribution, social welfare educational institutions, mid-day meals and other welfare schemes. Currently, around 9.64 lakh tonnes of rice is available in buffer godowns, with another 18.39 lakh tonnes expected through pending custom-milled rice deliveries.

As a result, the projected 28.03 lakh tonnes is estimated to meet public distribution requirements until September 2027.

“Existing stocks can meet requirements for three-four months, covering ration distribution, mid-day meals, social welfare hostels and other schemes. Supplies for another seven to eight months are pending with millers and are expected shortly,” officials said. However, the prolonged holding of stocks by millers and uncertainty over fresh procurement could complicate supplies, particularly of fine rice varieties.

Officials indicated that the government may be unable to intervene immediately if shortages or sharp price increases occur in the open market. However, they said the State could seek the Centre’s support in such circumstances. The risk could deepen during the coming Yasangi (Rabi) season, as the Congress government has asked farmers not to cultivate paddy. With no immediate market intervention planned, the State faces the challenge of accelerating procurement while ensuring supplies for welfare programmes and containing fine rice prices.