Time to Sort Out India’s Cereal Mess

Context:

• India is facing a structural imbalance in its food system, marked by a surplus of cereals (especially rice) and persistent deficits in pulses and oilseeds.

• This imbalance has implications for food security, fiscal sustainability, farmer incomes, nutrition, and environmental sustainability, calling for crop diversification and reforms in procurement and the Public Distribution System (PDS).

Key Highlights:

Cereal Surplus and Procurement Stress

• Rice procurement reached 119.86 lakh tonnes by October 31, 2025, a sharp increase from 82.08 lakh tonnes in the previous year.

• Tamil Nadu reported paddy procurement challenges due to:

  • Expansion in cropped area

  • Allegations of corruption in the Tamil Nadu Civil Supplies Corporation (TNCSC)

• Excess procurement has strained storage capacity and increased fiscal costs.

Pulses and Oilseeds Deficit

• India imports:

  • Edible oils worth ₹1.2 lakh crore annually

  • Pulses worth ₹30,000 crore annually

• This is paradoxical as India is the largest global producer of pulses, yet remains import-dependent due to:

  • Low productivity

  • Stagnant oilseed output

Fiscal Burden of Food Subsidy

• The Union government spends around ₹2 lakh crore annually on food subsidies, largely driven by:

  • Rice and wheat procurement

  • Storage and distribution under PDS

Policy and Structural Concerns

• Overemphasis on rice and wheat MSP procurement discourages crop diversification.

• Continuous rice cultivation affects:

  • Soil health

  • Groundwater depletion

  • Agro-ecological sustainability

Proposed Solutions and Reforms

• Allow free export of rice to manage surplus.

• Promote crop diversification towards pulses, oilseeds, and millets through:

  • Financial incentives

  • Technical guidance

• Encourage direct tie-ups between farmers and agri-product manufacturers, supported by Farmer Producer Organizations (FPOs).

• Involve FPOs, Self-Help Groups (SHGs), and cooperative societies in paddy procurement to improve efficiency and reduce dependence on existing agencies like FCI.

Relevant Prelims Points:

• Issue: Structural cereal surplus alongside pulses and oilseed deficit.

• Causes:

  • MSP and procurement bias towards rice and wheat

  • Weak incentives for oilseeds and pulses

• Government Institutions:

  • FCI – procurement, storage, distribution of foodgrains

  • PDS – subsidised food distribution

• Benefits of Reform:

  • Reduced import bill

  • Improved nutritional security

  • Better environmental outcomes

• Challenges:

  • Resistance from farmers dependent on rice MSP

  • Transition risks during diversification

• Impact:

  • Fiscal stress on food subsidy

  • Environmental degradation due to mono-cropping

Relevant Mains Points:

• Key Definitions & Institutions:

  • MSP: Price assurance mechanism to protect farmers from market volatility.

  • FCI: Central nodal agency for foodgrain management.

  • PDS: Instrument for food security under the National Food Security Act.

• Governance and Economic Concerns:

  • Procurement-heavy policy undermines market signals.

  • Nutritional outcomes suffer due to cereal-centric PDS.

• Environmental Dimensions:

  • Rice overproduction contributes to water stress and methane emissions.

• Way Forward:

  • Rationalise MSP and procurement to include pulses and oilseeds.

  • Reform PDS to include nutri-cereals and pulses.

  • Strengthen FPO-led procurement and supply chains.

  • Promote agro-ecologically suitable cropping patterns at the State level.

UPSC Relevance (GS-wise):

• GS Paper 3: Agriculture, food security, subsidies, environment

• GS Paper 2: Governance, public policy, institutional reforms

• Prelims: MSP, FCI, PDS, crop diversification