Punjab’s paddy procurement season began on October 1, but the state's granaries are already packed with wheat and rice from previous seasons. Fresh paddy is arriving in mandis, yet old stocks remain uncleared. Where, then, will the newly procured crop be stored? This is the pressing question facing Punjab.
The state holds at least 265 lakh metric tonnes (LMT) of foodgrains, while its total storage capacity is 249 LMT. The problem goes beyond storage space: grain is moving out too slowly, and deliveries of rice from previous seasons remain pending. This is putting pressure on rice mills, storage facilities, and the procurement system as a whole. Punjab faced a similar crisis in 2019–20. Now, with the old and new procurement cycles overlapping again, managing the incoming crop remains a severe challenge.
How did Punjab reach this situation?
Under the procurement system, government agencies buy paddy, which is sent to rice mills for custom milling—the process of converting paddy into rice. Government agencies then deliver the milled rice to the Central Pool (the country's foodgrain reserve) before transporting it to states where it is needed.
The Centre extended the deadline for delivering custom-milled rice (CMR) from the 2025–26 crop season to November 30. As a result, mills are still milling around 6 LMT of old paddy while fresh paddy arrives in mandis and is allotted to mills. About 3 LMT of rice from the previous crop is also listed among pending deliveries. Rice millers are caught between the two seasons, struggling to accommodate fresh paddy while processing and delivering old stocks. Meanwhile, the Food Corporation of India (FCI), which stores and transports foodgrains, has only around 2 LMT of space available.
What are the procurement targets for this marketing season?
For the 2026–27 Kharif Marketing Season (KMS), the Centre has set a procurement target of 180 LMT of paddy for Punjab, which is expected to yield around 120 LMT of rice after milling. Last year, the state procured 156 LMT of paddy.
To help ease the space crunch, the chief minister wrote a letter to Union Minister Pralhad Joshi, seeking to move 6 LMT of rice by October 10 and 15 LMT of wheat during October. Nearly 40 LMT of wheat procured during the 2026–27 Rabi Marketing Season (RMS) was stored at rice mills and mandi yards because of space shortages, and around 17 LMT remained because wheat moved out of Punjab more slowly than expected between June and September.
How much storage space does Punjab have?
Punjab handles around 300 LMT of paddy and wheat annually. Its storage network comprises around 181 LMT of covered storage and silo capacity across the FCI, state procurement agencies, and private facilities, along with 68 LMT of plinth storage. Plinths are open-air platforms used mainly for storing wheat.
The state currently holds around 150 LMT of rice and 115 LMT of wheat. Because of the space crunch, rice is being stored on open platforms intended primarily for wheat. This forces the 17 LMT of wheat from the previous Rabi season to remain stranded at rice mills and mandi yards. The problem became acute last year when rice millers refused to accept fresh paddy in October because their mills were full of the previous year's rice and could not take the new crop until the old rice moved out.
How much grain needs to be moved out of Punjab to ease the crisis?
Punjab's Food and Civil Supplies Department has repeatedly asked the FCI to move 12 LMT of rice out of the state every month. However, the FCI is moving only around 5 LMT of rice monthly. Officials put the combined monthly movement of rice and wheat at around 11–12 LMT, though the proportion varies (sometimes quantities are equal, other times rice accounts for one-third).
Although the Centre has deployed special trains, the rice industry says the pace remains too slow. Rice needs to move more urgently than wheat because it requires covered storage, whereas wheat can handle open platforms. To clear space, Punjab requested the movement of 15 LMT of rice and 10–12 LMT of wheat during September. However, only 8.3 LMT of rice and 4.3 LMT of wheat were actually moved out between September 1 and September 29.
While the Centre's prescribed period for custom milling runs from 1 December to 30 June, it grants extensions when deliveries are pending. State agencies and millers prefer to complete milling by 31 March because prolonged storage during summer and the monsoon increases the risk of infestation and deterioration.
Has private procurement remained negligible this year?
Despite high open-market grain prices, private players have procured very little paddy since procurement began. Private players procured just 35,283 tonnes by 16 October, while government agencies procured 28.28 LMT.
Will Punjab's storage problem worsen in the coming years?
The risk is that the backlog will grow if procurement consistently exceeds the quantity of grain moved out. At least 80 per cent of Punjab's wheat acreage and nearly all its paddy production are linked to the Central Pool. This extreme dependence makes timely transportation to other states critical.
Additional storage in other states would let grain move directly to storage facilities or consumption centres, rather than waiting at mills and mandi yards for space to open up.
Is building more storage capacity in Punjab the solution?
More storage would help, but land costs and existing infrastructure limit expansion. Even if additional capacity is built, it could fill up quickly if grain continues to move out too slowly. Punjab needs a combination of additional storage, faster inter-state transportation, and facilities in other states. Uttar Pradesh and Bihar, where land is relatively cheaper, have been proposed as possible locations for additional storage.
Another option is to transport rice directly from Punjab's mills to storage facilities outside the state after milling, reducing the need to store finished rice in Punjab while waiting for the FCI. Punjab is trying to add 40 LMT of storage capacity, a process that could take one to two years. Until then, quicker transportation remains essential to managing the incoming crop.
What is the way forward?
Modern silos and scientific storage facilities could improve long-term storage and reduce dependence on traditional covered godowns. The FCI and state procurement agencies also need real-time inventory management to match available storage space with expected procurement volumes and plan ahead.
Specialised rail and road arrangements could speed up grain movement from surplus-producing states. Officials also stress the need to closely monitor custom-milled rice deliveries, identifying and resolving delays in milling, transportation, or government acceptance before the next delivery cycle begins. The solution requires procurement, milling, storage, and transportation to work together.