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Picture Courtesy: Indian Express

Context:

India has overtaken China to become the world’s largest rice producer in 2024–25, producing 150 million metric tonnes, compared to China’s 145.28 million tonnes. India now accounts for 28% of global rice production, reflecting steady growth over decades. However, this achievement raises concerns related to water security, crop diversification, fiscal stress, and nutritional outcomes.

Current status of rice production:

• India produced 150.18 million tonnes of rice in the 2024–25 crop year, making it the world’s largest rice producer, surpassing China, which produced 145.28 million tonnes. 

• India’s rice exports have been strong. In 2025, exports rose to about 55 million tonnes (second-highest on record), with both basmati and non-basmati categories growing. 

• India accounts for roughly 28% of global rice production. 

• India and China together produce over half of the world’s rice output, with Bangladesh, Indonesia, Vietnam, Thailand, and other Asian countries also contributing significant volumes. 

Picture Courtesy: India Data Map

Importance of India’s rice stocks:

• Food security: India’s rice stocks form the backbone of national food security by ensuring uninterrupted supply of foodgrains under the NFSA, PDS, Mid-Day Meal and ICDS schemes, especially during droughts, floods and supply shocks. 

• Price stabilisation: Adequate rice stocks enable the government to intervene in markets through mechanisms like the Open Market Sale Scheme (OMSS) to control price volatility and contain food inflation. 

• Crisis and disaster management: Large rice reserves provide immediate relief during emergencies such as natural disasters, pandemics and humanitarian crises, thereby strengthening economic and social resilience. 

• Farmer income assurance: High rice stocks reflect strong MSP-based procurement, providing assured markets and income stability to paddy farmers, particularly in Punjab, Haryana, Chhattisgarh and Odisha. 

• Strategic and geopolitical importance: Surplus rice stocks allow India to remain the world’s largest rice exporter and to regulate exports strategically during global food shortages. 

• Support to welfare state: Rice stocks underpin India’s rights-based welfare framework, enabling large-scale food subsidies and effective redistribution to vulnerable populations. 

• Policy flexibility: Excess rice stocks provide policy flexibility for ethanol production, animal feed and international food aid, allowing better management of surpluses. 

• Associated concerns (Value Addition): While crucial, persistently high rice stocks also lead to high fiscal costs, encourage water-intensive paddy cultivation, and discourage crop diversification, raising environmental sustainability concerns.  

Rational behind paddy preference by farmers:

• Assured MSP and procurement: Paddy enjoys the strongest MSP-backed procurement system in India, with the government procuring about 13% of total rice production (2023–24), giving farmers guaranteed price and market assurance. 

• Higher and stable returns: At the 2021–22 MSP, paddy generated a net return of ₹56,226 per hectare, significantly higher than maize (₹17,856/ha) and competitive with moong (₹45,665/ha), making it one of the most remunerative crops. 

• Wide cultivation and infrastructure support: Paddy is grown in 614 out of ~800 districts and covers about 42 million hectares (2024–25), supported by a dense network of mandis, FCI procurement centres and rice mills.
• Low marketing and price risk: Unlike pulses and oilseeds, paddy farmers face minimal price volatility due to assured procurement, reducing dependence on private traders. 

• Heavy input subsidies: Paddy cultivation benefits from subsidised electricity, fertilisers, irrigation and seeds, lowering production risk and costs, especially in states like Punjab and Haryana. 

• High and reliable yields: Rice yields are relatively predictable, with Punjab recording ~4,428 kg/ha, Andhra Pradesh ~3,928 kg/ha, compared to the national average of 2,929 kg/ha (2024–25). 

• Export demand and global market strength: India is the world’s largest rice exporter, exporting 6 million tonnes of basmati and 13 million tonnes of non-basmati rice in 2024–25, creating sustained domestic demand. 

• Weak performance of alternative crops: Other crops show stagnation or decline—for example, cotton yield fell from over 500 kg/ha (2013–14) to ~440 kg/ha (2024–25), making paddy a safer choice. 

• Risk aversion of small and marginal farmers: For small farmers, paddy offers a low-risk, high-assurance income option, crucial for livelihood security in the absence of strong procurement for alternatives. 

Challenges of Paddy dominance:

• Severe water stress: Paddy is a highly water-intensive crop, requiring about 1–3 tonnes of water to produce 1 kg of rice, leading to groundwater depletion in states like Punjab, Haryana and western Uttar Pradesh. 

• Declining groundwater levels: Large-scale paddy cultivation in water-scarce and semi-arid regions has caused over-extraction of aquifers, triggering long-term ecological and health problems. 

• Regional yield inequality: Rice productivity varies sharply across states Punjab (4,428 kg/ha) and Andhra Pradesh (3,928 kg/ha) far exceed Bihar (2,561 kg/ha) and Uttar Pradesh (2,824 kg/ha), compared to the national average of 2,929 kg/ha (2024–25). 

• Excessive buffer stocks: As of January 1, 2026, India held about 06 million tonnes of rice, far above the buffer norm of 7.61 million tonnes, leading to storage inefficiencies and wastage risks. 

• High fiscal burden: The economic cost of rice (procurement, milling, transport and storage) is about ₹33 per kg, translating to ₹1.36 lakh per hectare, excluding power and fertiliser subsidies, straining public finances. 

• Environmental degradation: Continuous paddy cultivation contributes to soil nutrient depletion, methane emissions from flooded fields, and stubble burning, worsening climate and air pollution concerns. 

• Crowding out crop diversification: Dominance of paddy discourages cultivation of pulses, oilseeds and millets, undermining nutritional security and increasing import dependence for edible oils. 

• Policy distortion: Heavy focus on MSP-based procurement of rice creates skewed cropping patterns, weakening market signals for sustainable and climate-resilient crops. 

Way Forward:

• Promote crop diversification incentives: Shift from paddy-centric support to direct financial incentives for diversification into pulses, oilseeds and millets, especially in water-stressed and low-yield paddy districts. 

• Rationalise MSP and procurement policy: Gradually rebalance MSP and assured procurement by extending effective price support to pulses and oilseeds, while discouraging excessive rice procurement beyond buffer norms. 

• Region-specific cropping plans: Adopt agro-climatic and water-based crop planning, encouraging paddy only in high-rainfall and delta regions, and alternative crops in Punjab, Haryana and western UP. 

• Water-smart agricultural practices: Promote Direct Seeded Rice (DSR), micro-irrigation, and alternate wetting and drying (AWD) techniques to reduce water use where paddy continues. 

• Strengthen value chains for alternative crops: Develop storage, processing, marketing and export infrastructure for pulses, oilseeds and millets to ensure remunerative returns and reduce market risk. 

• Link diversification with nutrition goals: Align crop diversification with nutritional security by promoting protein-rich pulses and nutri-cereals, supporting schemes like POSHAN Abhiyaan. 

• Use excess rice stock savings productively: Utilise savings from reduced rice procurement (₹1.36 lakh per hectare) to fund diversification incentives, extension services and farmer training. 

Conclusion:

India’s paddy-centric growth has strengthened food security and farmer incomes, but its long-term sustainability depends on crop diversification toward pulses, oilseeds and millets, ensuring water conservation, fiscal balance and nutritional security while maintaining stable livelihoods for farmers.

Source: Indian Express