On April 10, 2026, in New Delhi, Bhagwant Mann asked Pralhad Joshi (who is the Union Minister for Food and Public Distribution) for immediate help with Punjab’s system of buying grain. There was a lot to discuss: getting the grain moved from farms more quickly, releasing the 9,000 crore rupees from the Rural Development Fund, lowering the interest on something called the Cash Credit Limit (CCL), and compensating farmers hurt by unexpected rain.
Grain Movement and Storage Dominate the Agenda
The main issue discussed was a lack of space to store the grain, and Mann believes this will cause problems with the Rabi Marketing Season in 180.88 Lakh Metric Tonnes (LMT) of food grains are already in covered warehouses in Punjab, almost filling the state’s total covered storage of about 183 LMT.
There’s only 0.50 LMT of covered space left for rice and 1.75 LMT for wheat in silos, meaning there’s basically nowhere to put the new harvest. Punjab anticipates buying 130-132 LMT of wheat this year, and if the old grain isn’t moved quickly, markets (mandis) and warehouses will be overwhelmed.
Mann pointed out that 8.71 LMT of wheat from last year is already exposed to the weather, and if it isn’t moved quickly, as much as 40 LMT could end up in less than ideal conditions. This creates risks to the quality of the grain, how it’s moved, and how much it will cost, both for the state and the organizations that need to store it properly.
To solve this issue of being blocked up, the central government has said it will run extra trains to move 155 LMT of grain out of Punjab. Mann also wants the amount of grain moved each month to increase, since in the last few months an average of 5 LMT of both wheat and rice have been moved from the state.
Special Trains, Higher Off-Take Targets, and PMGKAY Levers
Mann asked for at least 12 LMT of wheat and 12 LMT of rice to be moved each month. Increasing the speed at which grain is moved, he said, would create space before the peak of the harvest, allow markets to function smoothly, and stop farmers from being forced to sell at low prices.
He also suggested another option if moving the grain remains difficult: give out more food under the Pradhan Mantri Garib Kalyan Anna Yojana (like they did during the pandemic). He thinks this would speed up the movement of grain from the Food Corporation of India (FCI) and help families dealing with rising prices due to problems around the world.
Moving things faster would also help milling companies get rid of any leftover paddy rice from the 2025-26 KMS (Kharif Marketing Season). Mann believes all of this together would put Punjab in a much better position as the new wheat starts to come in.
Rs 9,000 Crore Rural Development Fund: The Infrastructure Squeeze
Aside from the immediate problem of moving grain, the Chief Minister urged the Union Minister to release about 9,000 crore rupees that are owed to Punjab under the Rural Development Fund. He said this money is directly connected to infrastructure in rural areas, and particularly the roads to and within villages and markets, which are essential for getting the grain from farms to the market and then to the national supply.
Mann understands the previous state government was accused of misusing these funds, and the Supreme Court is looking into it. However, he said that waiting for the court case to finish is damaging the rural areas that are needed to get crops from the fields to the markets and then to the national stores.
He has practical ideas for getting the money flowing again, including releasing it in installments, with careful supervision and making sure the money is only used for upgrading roads and market roads. He thinks these actions would quickly benefit the public without interfering with the court case.
Secretary-Level Mechanism and Next Steps
Mann said Joshi was agreeable and will create a group at the Secretary level to deal with the money owed and make decisions more easily. If this group meets quickly, it could resolve the concerns from the audits, update the costs used for calculations, and clearly state the conditions for releasing the RDF money.
This group could also work with the Union Finance Ministry and banks on the issues with funding the buying of crops, which have made it harder for Punjab to get its cash flow. Mann said a quick response to these things will be vital in the coming weeks as the harvest begins.
Procurement Finance: The Interest-Rate Mismatch
Mann also brought up the difference in cost for the Cash Credit Limit (used to pay for buying the crops). He said the group of banks led by SBI is charging an interest rate that is 0.5% higher than the rate the FCI gets when they collect money, and they calculate the interest every month. The central government’re temporary cost calculations only allow simple interest at the Food Corporation of India’s rate for when states get their money back. Chief Minister Mann says this difference is costing Punjab about 500 crore rupees each year, putting a strain on the state’s finances and the organizations that buy the grain. He wants the interest to be calculated the same way the banks charge interest on credit limits (CCL), or for the state to be able to calculate interest monthly as it builds up. He believes matching the cost of the money with the reimbursements would help the state manage its money better and lower the cost of keeping the grain in storage.
Mann also brought up problems with the system that affect the people and workers who run the markets (mandis). The commission for arhtiyas (commission agents) hasn’t changed much; it was 45.88 rupees per quintal of rice in 2020-21 and 46.00 rupees per quintal of wheat in 2021-22. The central government has just announced a small increase to 50.61 rupees for rice and 50.75 for wheat starting in 2026-27. However, arhtiyas are still asking for a commission of 2.5% of the Minimum Support Price (MSP) as set out in the Punjab Agricultural Produce Markets Act and its rules. Mann asked the central government to look at this small increase again, saying it’s not enough to cover expenses. He said arhtiyas are a vital part of the buying process, and they have the money to make sure farmers are paid quickly and the mandis operate smoothly.
Regarding payments to laborers, the Food Corporation of India has been holding back 30% of the market labor costs each year because of concerns about the Employee Provident Fund (EPF), and this is about 50 crore rupees that the arhtiyas say they are owed. Mann requested that this money be released right away, with a signed statement, and pointed out that state agencies are already using this method to ensure they can cover their debts while still making payments on time.
Arhtiyas and Mandi Labor: Commission, EPF Deductions, and Cash Flow
The Chief Minister also asked for special financial assistance for farmers whose crops were destroyed by rains at the wrong time of year. He said that when the weather ruins a harvest, quick help is necessary to protect families’ income and to encourage them to plant crops next season.
Mann emphasized how much Punjab contributes to the country’s food security, as Punjab’s farmers regularly provide a large percentage of the wheat and rice for the central government’s reserves. He explained that a problem at any point in the system in Punjab can create problems for the entire country.
Mann shared details of the meeting on X (formerly Twitter) and said the Union Minister had responded favorably to everything. He emphasized that all of these issues are related: moving the grain more quickly makes storing it easier, lower finance costs reduce financial pressure, and settling the outstanding amounts provides the funds for the roads and mandis that make the whole system work.
If special trains move grain rapidly and the amount moved each month gets closer to the target of 12 Lakh Metric Tonnes (LMT) for each grain, Punjab’s storage facilities will start to empty. This would create more covered space for new deliveries, lessen the chance of grain being stored in the open, and help to preserve the quality of the grain during the monsoon season.
Farmer Compensation and Punjab’s National Role
A clear plan for releasing the Rural Development Fund (RDF) money would allow for repairs and improvements to the roads to the mandis before the peak harvest time. Combined with lower interest rates on the CCL, the purchasing agencies could pay farmers faster, reduce storage costs, and move the grain to those who need it and to the mills more efficiently.
Fixing the arhtiya commissions and the EPF deductions would also make the payment process smoother. Having money available for the agents and workers isn’t a minor point; it determines how quickly the grain is weighed, loaded onto transport, moved and the details are finalized.
The meeting showed a practical way forward that focuses on speeding up transportation, aligning financial arrangements, and helping those involved. The promise of special trains is a good first step. A system at the Secretary level to settle outstanding amounts and fix the problems with the cost calculations could turn this positive attitude into real results.
What Timely Decisions Would Mean for RMS 2026-27
Because wheat is now arriving in large quantities, there isn’t much time. How successful things are will depend on how much grain is moved each month, how quickly money gets to the road projects, how reliably farmers are paid, and whether workers and agents receive the money that has been withheld.
All of these changes will benefit Punjab’s rural economy and build on each other. For the country’s food security, a Punjab purchasing system that isn’t backed up means less risk of spoilage in storage, a more reliable supply for social programs, and easier distribution when inflation or issues around the world put the system to the test.
Mann was direct in Delhi, but focused on solutions: pay what is owed, match financial rules to what is happening on the ground, and move the grain as quickly as the season requires. The Minister Joshi’s promise to carefully consider the situation, along with the concrete action of providing special trains, now sets the stage for choices that can bring stability to the mandis and help farmers when they need it most.
