India’s agriculture story today is filled with contradictions. On one hand, the country holds massive rice stocks in government godowns, sometimes far beyond buffer norms. On the other hand, India continues to import large quantities of pulses and edible oilseeds, even though it is among the world’s largest agricultural producers.

This situation presents a clear cereal paradox. While the nation struggles to manage surplus rice and wheat stocks, it spends billions of dollars on importing pulses and edible oils every year. The imbalance raises serious questions about crop planning, procurement policy, minimum support price (MSP) structure, trade policy, and long-term food security strategy.

It is time to sort out this cereal mess before it becomes economically unsustainable and environmentally damaging.

The Surplus Problem: Mountains of Rice

India is one of the largest producers of rice in the world. Thanks to the Green Revolution, improved irrigation, and strong MSP-backed procurement, rice output has steadily increased over decades.

The Food Corporation of India (FCI) procures large quantities of rice every year under MSP operations. As a result:

• Government warehouses often hold stocks above buffer norms.

• Storage costs rise significantly.

• Grain sometimes deteriorates due to poor storage conditions.

The Public Distribution System (PDS) distributes rice and wheat at subsidised prices, but procurement often exceeds distribution needs.

This leads to:

• Excess inventory

• High fiscal burden

• Inefficient resource allocation

Despite record stocks, the government continues to support rice production heavily, creating a cycle of overproduction.

The Import Paradox: Pulses and Oilseeds

While rice and wheat are available in surplus, India imports:

• Pulses such as tur, masoor, and chana

• Edible oils like palm oil, soybean oil, and sunflower oil

India is one of the largest consumers of pulses and edible oils in the world. However, domestic production does not meet consumption demand.

As a result:

• India imports millions of tonnes of edible oil annually.

• Pulses imports fluctuate depending on domestic output.

The country spends billions in foreign exchange to meet this deficit.

This is the paradox: surplus cereals and deficit protein and oil crops.

Why This Imbalance Exists

The imbalance is not accidental. It is the result of long-term policy design.

1. MSP Incentive Structure

The Minimum Support Price (MSP) mechanism strongly incentivises rice and wheat cultivation. Farmers in states like Punjab and Haryana prefer growing paddy because:

• Procurement is assured.

• Payment is relatively timely.

• Price risk is minimal.

In contrast, pulses and oilseeds:

• Do not enjoy the same procurement certainty.

• Face price volatility.

• Lack strong government buying support.

Naturally, farmers shift towards crops that guarantee income security.

2. Procurement-Centric Policy

India’s food security policy historically focused on cereals due to:

• Hunger concerns

• Calorie deficiency

• Green Revolution legacy

As a result, government agencies built strong procurement systems for rice and wheat but did not develop similar mechanisms for pulses and oilseeds.

Without assured procurement, farmers hesitate to diversify.

3. Irrigation Bias

Rice cultivation requires significant water. Ironically, surplus rice is grown in water-stressed states.

Punjab and Haryana, which have declining groundwater levels, continue to grow water-intensive paddy because:

• MSP incentives exist

• Procurement is guaranteed

Meanwhile, pulses and oilseeds are often grown in rain-fed areas with lower productivity.

This creates environmental and economic imbalance.

4. Consumer Demand Shift

India’s food consumption pattern has evolved.

Earlier, calorie security was the primary concern. Today:

• Protein demand has increased.

• Edible oil consumption has risen sharply.

• Dietary diversification is underway.

However, production patterns have not fully adapted to changing demand.

This mismatch increases dependence on imports.

Economic Cost of the Cereal Surplus

Holding excess cereal stocks is not cost-free.

The government bears:

• Procurement cost

• Storage cost

• Transportation cost

• Subsidy burden under PDS

The food subsidy bill runs into lakhs of crores annually.

When stocks exceed buffer norms:

• Carrying costs increase

• Grain may deteriorate

• Opportunity cost of funds rises

This puts pressure on fiscal resources.