Ahead of paddy procurement, storage squeeze forces Punjab to ease rice milling norms

With storage and evacuation already under pressure, millers say they are struggling to clear old stocks even as they prepare for another bumper procurement season.

According to the Punjab Food, Civil Supplies and Consumer Affairs Department’s district-wise milling report, 156.10 lakh metric tonnes (LMT) of paddy procured during KMS 2025-26 was stored with rice mills. At the prescribed 67 per cent out-turn, it was expected to yield about 105.63 LMT of rice.

By September 1, however, only 91.19 LMT, or 86.33 per cent, had been delivered to government agencies, leaving 14.45 LMT yet to be delivered. On the corresponding date last year, delivery had reached 99.96 per cent.

The backlog has also exposed the pressure on Punjab’s evacuation network. Around 49,819 wagons were pending for movement of rice as of September 1, while only about 32,062 MT was moved during the day.

Under the normal custom milling arrangement, millers are required to complete delivery of rice by March 31. This year, the deadline has been extended to October 31, giving them additional time to clear the previous season’s stocks.

Officials and industry representatives, however, say the problem is no longer simply one of milling capacity. The bigger constraint is the lack of space to store rice after it is milled and the slow movement of stocks out of the state.

“The contracts are allotted by the middle of September. A miller cannot be expected to wait till October 31 to become eligible to receive paddy when the actual delivery against the previous allocation can be completed only by that date,” a source said.

The 90 per cent criterion, the source said, would allow the government to begin allocating paddy to millers who had substantially met their earlier obligations instead of waiting for complete delivery at a time when the storage and evacuation system was already under severe pressure.

Punjab’s overall storage position remains stretched. Against foodgrain storage capacity of around 180 LMT, stocks in the state are estimated at nearly 271 lakh tonnes, with large quantities of rice and wheat occupying government storage facilities.

The situation has been aggravated by the slow movement of rice to consuming states. Chief Minister Bhagwant Mann has repeatedly taken up the issue with the Centre, seeking faster evacuation of stocks through railway rakes.

Rice millers too had flagged the space crunch last month, saying delays in moving rice were holding up milling operations. While milling had reached around 80 per cent in some major districts, it remained substantially lower in several other centres.

“The issue of storage space has been repeatedly raised. The old stock is still occupying space in mills and warehouses, while the new paddy season is about to begin,” said Prem Goel, president of the Arhtiya Association of Punjab and a rice miller.

Goel said mills were increasingly being required to operate almost throughout the year, leaving little time for maintenance or preparations between procurement cycles. Prolonged storage also raises concerns about damage and discolouration of stocks, higher broken-rice percentages and deterioration of gunny bags.

The challenge is particularly acute this year. Paddy has been sown over a record 32.76 lakh hectares and the State has set a procurement target of 180 LMT for KMS 2026-27.

The procurement chain begins with government agencies purchasing paddy, which is then stored with rice mills for custom milling. The milled rice is subsequently delivered to government agencies and forms part of the Central Pool. Any delay at the final delivery stage therefore leaves both paddy and rice occupying space that will be needed for the next crop.

The Cabinet also approved the Punjab Foodgrains Transportation Policy 2027 and the Punjab Foodgrains Labour & Cartage Policy 2027, saying the measures were aimed at ensuring smooth and hassle-free procurement during KMS 2026-27.

The government reiterated that it would lift every grain offered by farmers during the coming season. The Cabinet also authorised Mann to amend provisions of the approved policies, if required, in view of administrative exigencies arising during the procurement season.