In addition to being 74% over average, Punjab experienced 253.7 mm of rain in August—the most the state had seen in the previous 25 years.
In addition to temporary inflation in paddy prices, experts cautioned that the tragedy would affect the nation’s public distribution system (PDS).
The floods badly destroyed at least 3 lakh acres of agriculture, mostly rice fields, in all 23 districts, making Punjab a disaster-affected state on September 3. This caused experts to question whether this would negatively impact the government’s PDS procurement pattern this season and cause short-term inflation in crop prices.
The natural disaster struck during the summer kharif season of planting and only weeks before harvest, which, according to agricultural experts, is expected to have an effect on India’s public distribution system (PDS) in addition to rice exports.
Since most of the afflicted region is close to the rivers, paddy crops will be the most badly impacted, apart from wheat and millets like jowar (sorghum) and bajra (pearl millet).
The Public Distribution System (PDS) provides low-income families with subsidized essential commodities including rice, wheat, and sugar in order to ensure food security. Punjab and Haryana are two of the primary states that provide the bulk of the grains utilized in the PDS system, according to officials. Punjab State supplies most of the rice for the government’s PDS. Furthermore, the state has one of the highest proportions of farmers receiving the Minimum Support Price (MSP) for purchases made by state agencies and the Food Corporation of India (FCI).
The Ministry of Consumer Affairs, Food, and Public Distribution reports that up till November 2024, at least 6.58 lakh Punjabi farmers benefited from the government’s Rs 27,995 crore paddy purchase at the MSP during the Kharif Marketing Season (KMS) 2024–25.
At the moment, the state’s exports are unaffected, according to RC Ralhan, chairman of the Federation of Indian Export Organizations (FIEO). I do not think there would be a big impact on exports since floods also hit Pakistan, which is the neighbor and the only other major exporter of basmati rice. Thus, the limited supply can lead to better realizations,” he said.
According to Ralhan, even after the floods passed, it would take weeks or even months for the farmers to desilt their land and get it ready for the following planting season. Punjab has destroyed all of the crops that were in the ground. As a result, the impact will be most apparent during harvest season in October and November. We will see increased procurements from other states, like Haryana, Madhya Pradesh, Uttar Pradesh, and so on, because Punjab’s share is likely to decrease at that time,” he said.
FIEO’s Ralhan and Indra Shekhar Singh said the situation might lead to short-term inflation in paddy prices. Although Punjab led India in rice production during the 2024–2025 cropping season, its share of the central pool was lower than in previous years due to a shortage of storage capacity.
A third of Punjab’s GDP comes from the agricultural sector, which provides a livelihood for almost three-quarters of the state’s people.