Central rice stocks have reached 37.48 MT, the highest in 20 years—over three times the buffer. Rising procurement under free ration schemes and low OMSS offtake have led to surplus, prompting concerns over rising subsidy costs and storage challenges ahead of the next paddy season.

Written by Sandip Das

The government’s rice stocks have soared to 37.48 million tonne (MT), the highest level in the last two decades, and over three times the buffer as of July 1. The stocks accumulation is primarily because of higher procurement for the free ration scheme.

Current rice stocks exclude 19.89 MT of grain yet to be received from millers. The prescribed buffer for July 1 is 13.54 MT.

In the current season (2024-25), the rice procurement by the Food Corporation of India (FCI) and state agencies has crossed 53.11 million tonne (MT), marginally higher than 52.54 MT purchased in previous season. Around 41 MT of grains are supplied annually for Pradhan Mantri Garib Kalyana Anna Yojana and other welfare schemes .

An official said that because of the average minimum support price (MSP) purchase in excess of 55 MT of rice in the last four seasons, around 10-12 MT of surplus rice stocks annually got added to the central pool leading to higher stocks levels.

Sources said that if rice stocks are not brought down, the carrying cost of grain will steadily rise and may lead to a spike in food subsidy expenses.

In addition, the agencies may face storage crunch prior to the commencement of paddy from the next season from October 1.

The paddy procurement season for 2025-26 season (October-September) commences from October 1.

After procurement of paddy by FCI and state government owned agencies from the farmers at minimum support price (MSP), the grain is handed over the millers for conversion to rice.

“Actual rice arrivals in the next season would start arriving by December after commencement of procurement from October 1,” an official said.

For the government, the economic cost of rice, including MSP, storage, transportation and other costs at the beginning of the current fiscal was estimated at Rs 4,173/quintal which may see an increase due to surplus rice stock.

To reduce stockpile, the food ministry has allocated 2.8 MT from the central pool stock to be supplied to distilleries for ethanol production at subsidised rate of Rs 2250/quintal in FY26.

In FY25, the FCI had allocated 4.63 MT of rice to the state’s social welfare scheme (1.12 MT), open market sale scheme (1.96 MT) and ethanol manufacturing (2.3 MT).

In 2023-24, only 0.19 MT of rice was offloaded through OMSS to bulk buyers at Rs 2900/quintal out of total offloading of grains of only 0.64 MT.

Rice stocks have been rising because of the lukewarm response to open market sale scheme (OMSS) of rice to bulk buyers at subsidised rate in the last couple of years.

However, the corporation has 35.57 MT of wheat which is against the buffer of 27.58 MT.

The government has estimated food subsidy at Rs 2.03 lakh crore in FY25.

Under PMGKAY , 809 million people are currently being provided 5 kg of specified grains per month free of cost. The free ration scheme is being extended till the end of 2028 and it would cost the exchequer Rs 11.8 trillion.

Published Date: July 3, 2025