Rice vs Alternatives: Govt floats idea of using Rs 1.36 Lakh/Ha ‘savings’ to push crop shift

The Centre’s focus on diversification of cultivation is aimed at not only focusing on natural resources conservation but also enhancing farmers’ income and nutritional security. The idea is to promote oilseeds and other crops in place of rice so that dependence on imports can be curtailed, said a source. India is heavily reliant on imports to meet its domestic demand for edible oil.

‘Advantage of rice’

Discussing crop diversification strategies, Agriculture Ministry officials told attendees that paddy has a clear profitability advantage over alternatives, discouraging crop shifts. At the Minimum Support Price (MSP) of 2021-22, the net returns on paddy cultivation were Rs 56,226 per hectare, while for maize and moong, they were Rs 17,856 and Rs 45,665, respectively, officials said, citing the advantage of paddy over the other crops.

Highlighting this “advantage” of rice over the alternative crops, the officials acknowledged that the “incentives” are needed to “encourage crop shift” and the same can be “funded through savings from economic costs of paddy”.

The officials pegged the economic cost of rice at Rs 1.36 lakh per hectare, after factoring in the costs incurred by the Food Corporation of India (FCI) for minimum support price-based procurement, milling, transportation, and storage.

“Rice stored in the godowns of FCI costs approximately Rs 33/kg, including procurement costs, milling, transport, storage, etc.

Accordingly, assuming a yield of rice of 41.25 q/ha, the government spends about Rs. 1,36,000/ha. This does not include subsidies given for power, fertilisers and seed,” said an official.

The officials added that if one hectare of rice is left fallow or a crop that is not procured is grown, the government has a “resource saving of Rs. 1,36,000/hectare”.

No compromise on food security

While suggesting a strategy for crop diversification, the officials said that MSP or price incentivisation for diversified crops, and also assured that procurement can be provided. They said the focus should be on the availability of quality seeds and machinery to make easy harvesting of alternative crops like green gram, groundnut, maize, and cotton.

The officials, however, cautioned that the “diversification has to be done without compromising on food security.”

The districts with lower paddy yield than the national average (about 2800 kg/hectare) and lower area coverage can be focused for diversion, said the officials, adding that pulses and oilseeds may be promoted in a phased manner in accordance with their agro-climatic suitability and soil conditions.

Further, in regions where FCI is procuring comparatively lower quantities of wheat and paddy as compared to other parts of the country, pulses and oilseeds may be promoted, the officials said, adding that assured procurement of the diversified crops through agencies such as the National Agricultural Cooperative Marketing Federation of India Ltd (Nafed) and National Cooperative Consumers Federation of India (NCCF).

Paddy is the biggest crop, having an area coverage of 514.23 lakh hectares during 2024-25. It is grown in 614 districts across the country. It is a highly water-intensive crop, and its cultivation has led to depletion of the groundwater level across several parts of the country.

During the 2023–24 Kharif Marketing Season, the FCI procured 525.48 LMT of rice, which accounts for 38.13 per cent of the total rice production in the country, according to officials from the Agriculture Ministry. Nearly 56.10 per cent of the rice procurement is done from Punjab, Haryana, Chhattisgarh and Odisha, the officials said.

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