Under the terms of the agreement, the NCCF was required to convert the procured paddy into rice and deliver it to TNCSC, following which TNCSC will release the payment to NCCF.

Although the NCCF procured approximately 3.6 lakh metric tonnes (MT) of paddy from farmers, it failed to convert even 40% into rice. This disrupted the supply chain and delayed the payment cycle, according to officials.

Moreover, much of the paddy procured by NCCF remained stored in open Direct Procurement Centres (DPCs), resulting in increased moisture content and storage losses during rains. As a result, the NCCF suspended the paddy procurement in eight districts.

B Murugesh, Managing Director (in-charge), TNCSC, told TNIE that all the paddy stocks have been cleared from the DPCs managed by NCCF. “As of June 22, both TNCSC and NCCF have jointly paid Rs 9,396 crore to 4.71 lakh farmers. The pending dues of Rs 143 crore will be settled within 10 days,” said the official. During the Kharif Marketing Season 2025-26, so far 39 lakh MT of paddy has been procured, compared to 29 lakh MT during the same period last year.

“This year, paddy procurement is expected to exceed last year’s figures by 8 to 9 lakh MT,” added Murugesh.

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