The state of Punjab has incurred an estimated loss exceeding ₹5,000 crore following severe floods in August–September that caused widespread damage to paddy crops. According to official data, the state lost 17.54 lakh metric tonnes (LMT) of paddy production during the kharif season.
Total paddy procurement this year stood at 157.39 LMT, significantly lower than 173.93 LMT last year. As a result, payments made to farmers dropped sharply to ₹37,237.42 crore, compared to approximately ₹43,000 crore in the previous year. Officials noted that this decline has led to reduced cash flow in rural economies, ultimately impacting consumer spending, market activity, and state tax revenues.
Meanwhile, an inquiry by the Food and Supply Department into unexpectedly high paddy arrivals in the flood-affected districts of Amritsar, Tarn Taran, and Fazilka found that the increase was due to a shift in cultivation patterns rather than an absence of flood damage. Responding to these findings, the government temporarily halted paddy procurement in these districts.
A senior Food and Supply Department official clarified that a cyclical fall in global basmati prices last year prompted farmers to switch from basmati to non-basmati paddy, resulting in expanded cultivation and consequently higher arrivals of non-basmati varieties. This increase offset the flood-induced reduction, causing overall arrivals to mirror last year’s figures despite crop damage.
Punjab saw a dramatic fall in basmati procurement:
33.02 LMT basmati was procured last year
Only 15.10 LMT reached mandis this year (as of November 17)
Additionally, basmati prices dropped from an average of ₹3,744 per quintal last year to ₹3,400 per quintal this year, deepening the financial strain on farmers already grappling with flood losses.
State authorities are assessing long-term impacts on Punjab’s agricultural economy and considering measures to stabilise farmer incomes amid continued market fluctuations and climatic challenges.