As Fine Paddy Prices Skyrocket… Procuring fine rice for PDS a big challenge for Telangana govt

Hyderabad: Primary Agricultural Cooperative Societies (PACS) and Indira Kranthi Patham (IKP) centres in Telangana may face shortage in procuring paddy during the current Kharif season as the rising prices of fine varieties in the open market could prompt farmers to sell their produce to private traders and rice millers.

The Telangana government introduced the distribution of fine rice through the Public Distribution System (PDS) with the objective of ensuring that poor families also have access to fine-quality rice. To meet the demand for fine rice through ration shops, the government encouraged farmers to cultivate fine varieties of paddy by announcing a bonus of Rs500 per quintal for eligible varieties.

With traders offering lucrative prices to farmers for fine paddy, it will be a big challenge for the government to procure rice for distribution through ration shops.

For the 2026–27 season, the government fixed the procurement price at Rs2,441 per quintal for common paddy and Rs2,461 per quintal for Grade-A paddy at PACS and IKP centres.

In addition, the government is offering a bonus of Rs500 per quintal for eligible fine varieties, taking the total procurement price for such paddy to Rs2,961 per quintal.

However, the state is witnessing an unusual market situation amid concerns over the possible impact of El Niño. Prices of fine-quality rice in the open market rose sharply, ranging from Rs6,500 to Rs9,500 per quintal. These prices may increase further. Traders attribute the situation partly to an alleged artificial shortage created by millers and traders, although the anticipated El Niño impact is yet to be felt in the state and could emerge during the coming summer.

According to market insiders, millers and traders are making substantial profits amid rising prices, and the trend could continue over the next two years unless the government intervenes to stabilise the market prices.

At the same time, millers and traders from Telangana and neighbouring states are approaching farmers to purchase fine-quality paddy at higher prices. A few days ago, Jai Sriram variety paddy fetched a record Rs5,016 per quintal at the Kesamudram agricultural market in Mahabubabad district. The record price was reportedly achieved for five bags of paddy sold through an e-NAM (National Agriculture Market) auction.

Good prices were also recorded for RNR variety paddy, maize, cotton, red gram and green gram. Meanwhile, fine-quality rice is retailing at Rs90 to Rs100 per kilogramme in the open market, raising concerns that increasing paddy prices could push rice prices further upward.

The price difference is likely to influence farmers' decisions on where to sell their produce. While eligible fine paddy fetches Rs2,961 per quintal, including the bonus, at government procurement centres, farmers may receive around Rs5,000 per quintal in the open market. As a result, many farmers may prefer private buyers over PACS and IKP centres.

Ramulu, a farmer, questioned why farmers would sell fine paddy at procurement centres when agricultural markets and private buyers were offering significantly higher prices. He added that farmers might also avoid selling coarse paddy at government centres if private traders offered more than the minimum support price of Rs2,441 per quintal.

Another farmer Shekharsaid that some financially well-off and resourceful farmers are storing their fine-variety paddy. “They get it milled at nearby rice mills, and sell the rice when prices soar, thus earning good profits,” he told The Hans India.

Although many farmers cultivated fine varieties with an eye on the government's bonus scheme, those who did not receive adequate irrigation water are cultivating coarse varieties. Srinaiah, a farmer, said his coarse paddy would be harvested within a few days and that he would compare prices at agricultural markets with those offered at PACS and IKP centres before deciding where to sell his produce.

If farmers increasingly turn to private buyers, government procurement centrescould face a shortage in procuring the required quantities of paddy this Kharif season, trade expert Sathyanarayana said.

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Venkateshwarlu Kolishetty

Venkateshwarlu Kolishetty