Why is Punjab asking Centre for extra funds to procure paddy?

Punjab has asked the Centre to enhance its Cash Credit Limit (CCL) after paddy arrivals at its mandis, riding on a bumper harvest, crossed the procurement level for which the state had originally secured funds. The state had been sanctioned a CCL of Rs 42,787 crore to procure 180 lakh metric tonnes (LMT) of paddy.

But arrivals had crossed 177 LMT by November 11, with another 3-4 LMT arriving daily. The state now wants to raise the procurement target to 200 LMT and has written to the Centre seeking additional CCL. Food and Civil Supplies Principal Secretary Rahul Tiwari confirmed as much.

"We have already written to the GoI for enhancing the CCL limit,” he told the Indian Express. The immediate concern is that paddy is still lying unsold in several mandis, even as procurement centres in some districts have been closed after their original targets were declared achieved.

Why were the procurement centres closed even as farmers continued to bring their produce to mandis? For the 2026–27 Kharif marketing season, the state government's Civil Supplies and Consumer Affairs Department, in a first of its kind move, fixed procurement quotas for each purchase centre.

The quota was calculated based on the average quantity procured at the said centre over the past three years. The farmers and farm union leaders had questioned the move, expressing concern over whether arrivals exceeding a mandi's fixed target will be turned away or face restrictions.

For example, former state BJP chief Sunil Jakhar claimed that Abohar grain market received 79,963 metric tonnes of paddy last year, while the state fixed this year's procurement target at just 67,200 metric tonnes. Similarly, against 2,26,207 metric tonnes procured across Fazilka district last year, the target for the current season was reduced to 1,76,960 metric tonnes.

Farmers claim that the reduction in targets came even as the area under paddy cultivation in the district continued to expand. Agriculture Minister Gurmeet Singh Khuddian said the initial assessment was based on the weather outlook and the previous year's production.

“Earlier farmers were apprehensive of less yield based on the rainfall pattern. However, the yield has increased this time,” he said, adding that the state had already taken up the matter with the Centre. Khuddian assured farmers that the CCL would be enhanced and “every grain will be picked up.” The state is also examining whether some of the paddy lying in border-district mandis has been brought in from neighbouring states.

Farmers and Opposition parties argue that the problem was not simply a higher-than-expected yield but an inadequate assessment of procurement requirements. This year, Punjab recorded an all-time high paddy area of around 36.86 lakh hectares.

This includes the area under Basmati, which is mostly procured by the private players and not at the minimum support price. Even if one excludes Basmati, the area under paddy is estimated at more than 26 lakh hectares. Farmers and union leaders had estimated produce at little over 200 LMT.

This has now become a political flashpoint. Farmers under the Samyukta Kisan Morcha protested against the closure of procurement centres, while in Abohar farmers dumped two trolley-loads of paddy outside the house-cum-office of AAP leader and 2027 poll candidate Dr Suhani Doda.

Jakhar accused the Bhagwant Mann government of failing to anticipate the higher arrivals and approaching the Centre in time. He said the state should procure the remaining crop with its own funds while seeking additional CCL.

Abohar MLA Sandeep Jakhar told The Indian Express questioned the basis for setting procurement targets. He said the area under cotton and kinnow in Fazilka was gradually shifting towards paddy, but the Agriculture Department did not acknowledge this change.

"The target was reduced and, consequently, paddy is still lying in the mandis. Farmers do not know where to go now," he said. Congress president Pargat Singh too attacked the AAP government, saying the crisis contradicted its claim that every grain was being procured.

He accused the AAP government of advancing the BJP's agenda and alleged that the ruling party was harassing farmers and weakening the procurement system.