Punjab Floods: Food Security Holds, but Prices Are Under Pressure

Arun Arora, a resident of Mehrauli, New Delhi, was surprised on a Sunday evening grocery run when he discovered that the price of India Gate Mogra Basmati Rice had risen by ₹5 per kilo. “In the last three years, whenever there was any increase in price, it was not more than a rupee,” says Arora. Out of curiosity, he checked the product overview on the TradeIndia website. It read, “This is one of the best varieties of basmati rice, grown in a fertile land called Punjab in Northern India.”

That fertile land is now under water. The recent floods in Punjab could not have arrived at a crueler time, just weeks before the Kharif paddy harvest. Field reports indicate extensive flooding across the state’s rice belt, and official tallies confirm that the damage spans all 23 districts. In Punjab, often called the breadbasket of India, the scale of the disaster is immense. Nearly half a million acres of farmland have been submerged, according to the state government.

This devastation is the result of a punishing monsoon. While heavy rains are common in northwest India during this season, August brought the highest rainfall in over two decades, according to the India Meteorological Department (IMD). Punjab recorded 74% more rain than normal, its highest level in 25 years. The IMD has also warned that September is likely to remain unusually wet.

And while the news of Prime Minister Narendra Modi’s visit to Punjab and Himachal Pradesh has raised optimism about operational support for farmers, there remains a widespread concern over regional spikes in food prices that could soon pinch consumer pockets.

The Collateral Damage

The fallout is not confined to rice alone. With all 23 districts affected, other crops such as maize and cotton are also under stress. Maize, which does not withstand waterlogging well when it begins flowering, is a key input for poultry and starch supply chains. Cotton, already struggling with pest attacks this season, has been submerged in major growing areas like Bathinda and Mansa, threatening supplies for Punjab’s textile cluster.

The question then is how much the country should really worry.

 “India’s PDS (public distribution system) is built to withstand such shocks, with buffer stocks, decentralized procurement, and a multi-state rice engine,” says Chirag Jain, food processing expert and partner at Grant Thornton Bharat. “But consumers will still feel the pinch in their monthly bills, as prices of maize products, poultry, cotton-based textiles, and basmati rice—segments where logistics and quality issues show up faster—are likely to rise.”

From a national food-security perspective, there is little reason to panic about the PDS in the near term given that central pool stocks are unusually high. As of July 2025, India’s rice stocks stood at 377.83 Lakh Metric Tonnes (LMT), almost three times the prescribed buffer norm of 135.40 LMT, according to data from Food Ministry. This buffer buys the system both time and flexibility.

That flexibility matters because procurement is never static. As of August 8, 2025, Kharif rice sowing is up by 39.45 lakh hectares compared to last year, creating room to lean more on other rice-surplus states such as Chattisgarh, Telengana, Andhra Pradesh and Uttar Pradesh. In practice, if Punjab’s arrivals dip, the Food Corporation of India and state agencies adjust procurement every season to balance the pool.

The immediate challenge, therefore, is less about the volume of procurement and more about the quality of arrivals. Much of the paddy will be damp and of uneven quality, which means it will take up more storage space and require extra handling. With roads and railways damaged, experts say mills will take longer to process the grain, causing delays and backlogs in mandis. As more crops come in under these conditions, agencies will need additional warehouses and will be under pressure to manage space, quality, and movement all at once.

And with it comes fear and panic.

“Sometimes what happens is that information now travels very fast from one case to another. The moment the market hears that the rice crop has been destroyed in Punjab, it assumes the state won’t be contributing anything to the national pool,” explains Sunil Kumar Sinha, Director, Centre for Regional Development Studies (CRDS), IDC, Chandigarh. “Even if there is enough buffer stock to take care of any exigency, the market still reacts as if there is going to be a shortage.”

Containing the Risk

The Punjab Agricultural University has already issued contingency advisories, such as rapid drainage and pest vigilance. Jain at Grant Thornton says, “In experience, how fast these advisories translate into field action will determine whether today’s ‘yield risk’ becomes tomorrow’s ‘availability shock’ for food and textile value chains.” For consumers, he adds, “This means higher costs outside the PDS umbrella."

Over the next two to six weeks, economists expect regional price spikes, especially in vegetables and cereals where supply chains are disrupted. Fodder, dairy, and basmati rice in premium urban markets are also likely to get costlier. “The impact of the floods in Punjab on standing crops will need to be closely monitored. Punjab is one of India’s major food grain producers, accounting for 9.6% of total production, and wheat alone contributes 15.2% of national output,” says Gaura Sen Gupta, Chief Economist at IDFC First Bank. She adds, “If cereal prices pick up, it could also push headline CPI (consumer price index) inflation higher.”

The floods in Punjab offer an important lesson. While any shortfall in Punjab’s procurement this year can be offset by other states, thanks to expanded acreage and ample stocks, what is harder to replace is the quality of export-grade basmati and the delicate ecosystem exposed by excess rainfall and late-season floods. Addressing this, experts argue will require better district-level flood management, improved drainage, on-farm moisture control, and planning procurement schedules around moisture levels, milling capacity, and logistics well before the monsoon peaks.

In short, India may have food security under control, but the floods show how vulnerable the country remains to price shocks outside the PDS.