States Urged Not to Offer Bonuses to Farmers on Paddy and Wheat

15-Apr-2026 04:22 PM

New Delhi. The Central Government has requested states to give serious consideration to refraining from offering farmers any additional bonus—over and above the Minimum Support Price (MSP)—on paddy and wheat.

The rationale cited is that such bonuses lead to surplus production of these crops within the country, necessitate massive procurement for the Central Pool, and result in farmers failing to devote adequate attention to increasing the production of pulses and oilseeds.

Notably, states such as Odisha, Chhattisgarh, Kerala, Tamil Nadu, West Bengal, Jharkhand, Rajasthan, and Madhya Pradesh are currently providing additional bonuses on either paddy, wheat, or both. The Department of Expenditure under the Union Ministry of Finance has sent letters to these states,

urging them to discontinue this practice of offering bonuses. Following the controversy sparked by this letter, the Ministry of Finance issued a clarification stating that the communication from the Department of Expenditure constitutes a voluntary suggestion rather than a binding directive.

The letter from the Department of Expenditure points out that the total stock of food grains currently held in the Central Pool is more than three times the minimum required buffer stock. This situation has significantly increased the financial and storage-related pressure on the Central Government. Procurement operations for wheat and paddy (Rabi crops) are currently underway, a process that could potentially exacerbate this crisis further in the coming days.

Essentially, the Central Government aims to prioritize boosting domestic production of pulses, oilseeds, and coarse cereals, while simultaneously stabilizing or limiting the output of wheat and paddy. This strategy is intended to help reduce the country's heavy reliance on the massive importation of edible oils and pulses.

A letter addressed to the Chief Secretary of Tamil Nadu by the Union Expenditure Secretary notes that bumper harvests of paddy and wheat have led to a substantial accumulation of government stocks. This situation is expected to give rise to a host of operational and logistical challenges. The letter further acknowledges that the provision of such bonuses serves as an incentive for farmers.