CHENNAI: Following the protests by farmers over delayed payments and the suspension of paddy procurement in eight non-delta districts during the peak of cultivation by the National Cooperative Consumers’ Federation (NCCF), functioning under the union government’s Department of Consumer Affairs, the state government has directed the Tamil Nadu Civil Supplies Corporation (TNCSC) to disburse the pending Rs143 crore directly to the affected farmers. The amount will later be recovered from the NCCF.
A total of Rs 143 crore will be disbursed to around 5,000 farmers within the next seven to 10 days, officials said. NCCF had procured paddy from these farmers in the eight districts – Tiruvannamalai, Kancheepuram, Tirunelveli, Ramanathapuram, Vellore, Ranipet, Villupuram and Thiruvallur – outside the Cauvery irrigation region.
Tamil Nadu’s decision to disburse the amount has followed a recent request from the union government, urging the state’s intervention to resolve the issue.
According to officials, the NCCF had procured paddy worth Rs 810 crore from 24,000 farmers, of which Rs 667 crore has been paid to 19,000 farmers as of June 20. TNCSC, the agency responsible for paddy procurement under the central pool system, has also decided to take over the procurement operations from the NCCF in these districts. The agreement between TNCSC and NCCF earlier allowed the latter to procure paddy at minimum support price (MSP) in the eight non-delta districts.
Under the terms of the agreement, the NCCF was required to convert the procured paddy into rice and deliver it to TNCSC, following which TNCSC will release the payment to NCCF.
Although the NCCF procured approximately 3.6 lakh metric tonnes (MT) of paddy from farmers, it failed to convert even 40% into rice. This disrupted the supply chain and delayed the payment cycle, according to officials.
Moreover, much of the paddy procured by NCCF remained stored in open Direct Procurement Centres (DPCs), resulting in increased moisture content and storage losses during rains. As a result, the NCCF suspended the paddy procurement in eight districts.
B Murugesh, Managing Director (in-charge), TNCSC, told TNIE that all the paddy stocks have been cleared from the DPCs managed by NCCF. “As of June 22, both TNCSC and NCCF have jointly paid Rs 9,396 crore to 4.71 lakh farmers. The pending dues of Rs 143 crore will be settled within 10 days,” said the official. During the Kharif Marketing Season 2025-26, so far 39 lakh MT of paddy has been procured, compared to 29 lakh MT during the same period last year.
“This year, paddy procurement is expected to exceed last year’s figures by 8 to 9 lakh MT,” added Murugesh.