Paddy procurement in Odisha has slowed significantly this season, sparking widespread farmer protests. Despite record yields, bolstered by a high minimum support price (MSP) and state bonuses, a massive supply glut has overwhelmed the state’s storage capacity and outpaced demand from the Food Corporation of India (FCI).
Officials said paddy procurement by the Odisha State Civil Supplies Corporation (OSCSC), the state’s dedicated procurement agency, was at 1.9 million tonnes as of January 12, down from 2.575 million tonnes on the same date last year. As a result, farmers said they were unable to sell their harvest or secure timely payments.
Narahari Roul, a farmer in Cuttack district. “I got the official permission to sell my paddy three weeks ago but the mandi in my panchayat is yet to be functional. The Primary Agriculture Cooperative Society officials who would do the procurement are not yet ready for the procurement,” he said.
Government officials noted that the current crisis is a byproduct of the state’s own success. Odisha’s paddy sector has expanded dramatically over two decades, with production surging from 4.61 million tonnes in 2000-01 to an estimated 19.7 million tonnes in 2024-25. Average yields have tripled to approximately 30 quintals per hectare, cementing Odisha’s position as India’s seventh-largest rice producer.
However, the infrastructure has failed to keep pace with this growth. In 2024-25, state agencies led by OSCSC procured only 9.2 million tonnes of paddy out of the 19.7 million tonnes harvested in the state. The Bharatiya Janata Party (BJP) government, which came to power in June 2024 on the back of promises including more money to farmers for paddy production, announced a ₹800 bonus over an MSP of ₹2300 per quintal.
Arabinda Padhee, additional chief secretary of the agriculture and farmers’ empowerment department, said the state did not have the resources to buy all the paddy or enough godowns. “We simply don’t have that much storage space to keep the rice after processing the paddy. Besides, the government lacks the resources to buy all the paddy that the farmers produce,” Padhee explained.
Each tonne of paddy that the government procures can be milled into 0.68 tonne of rice. This means 9.2 million tonnes of paddy that OSCSC bought in 2024-25 yielded 6.25 million tonnes of rice - far in excess of the state’s 2.4 million tonne annual requirement for several welfare schemes as well as the Public Distribution System (PDS).
The surplus rice would have to be lifted by the Food Corporation of India for distribution to other states, since neither the state government nor the rice millers has the storage capacity to keep it.
But FCI lifted only 2.4 million tonnes against an expected 4 million, leaving 1.4 million tonnes with rice millers whose storage facilities are now saturated.
General secretary of All Odisha Rice Millers Association, Laxminarayan Deepak Ranjan Das said they had to go on strike early this year as the warehousing charge of ₹7.20 per quintal of paddy was too low at a time when they didn’t have enough storage space.
Experts said the current crisis stemmed from several factors. One of them was that many states were now self-sufficient in paddy production, reducing demand.
“Most paddy produced in Odisha is parboiled (paddy is partially boiled in its husk before milling), which is usually eaten in states such as Telangana, Jharkhand and Bengal or other eastern states. But most of these states have become self-sufficient in rice production and don’t require rice from Odisha any longer, leaving the FCI with no option but to reduce offtake from Odisha,” said GAA Kumar, director of Central Rice Research Institute, Cuttack.
“As production climbs without corresponding consumption growth, procurement pressures are likely to rise.”
Experts said crop diversification was the way forward, since agriculture accounts for 26% of Odisha’s state GDP and employs about 65% of its workforce.
“The overdependence on paddy has to be brought down as most of the farmers are small and marginal. Long term solutions such as crop diversification into pulses, millets, maize and vegetables with assured price incentives are the answer. However, not all regions in the state may be suitable for vegetables or pulses. Besides, the lack of irrigation during the Rabi season is a major obstacle for farmers switching to vegetable farming. The state also lacks enough cold storages at block levels… Lack of enterprise among Odisha farmers in taking up non-paddy crops in also another factor,” said Dr Annie Poonam, principal agronomist in Central Rice Research Institute.
Farmer leader Simanchal Nahak said crop diversification had remained more of a slogan in the state.
“In the absence of a proper agricultural extension programme in panchayat level, which farmer would take up a non-paddy crop? Even if the farmers grow other crops, where is the MSP,” he asked.
Officials said continued paddy production could also lead to a water crisis since it takes 1-3 tonnes of water to produce 1 kilogram of rice.
“We overtook China as the world’s largest rice producer in 2024-25, accounting for nearly 28% of global outputs. Our storage systems across the country are full and thus farmers need to seriously look at other crops,” said a senior official of Odisha’s food supplies and consumer welfare department.
