Odisha’s Farm Sector in Crisis: Cuts, Broken Promises, Distress

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Budget cuts, procurement corruption, and neglected promises are pushing Odisha’s farmers to the brink

By Pradeep Kumar Panda

Bhubaneswar, August 8, 2025 — Odisha’s economy is deeply rooted in agriculture, with nearly half of its workforce relying on the sector. Yet, the state’s farmers are facing mounting challenges that threaten both their livelihoods and the state’s rural stability.

The numbers tell a grim story. The state’s GSDP growth has slowed from 9.6% in 2023–24 to 7.2% in 2024–25. More alarming, agricultural growth has halved from 7.6% to 3.8% in just one year. Agriculture’s share of GSDP has plunged from 30% to 18.9%, signalling a sector in distress.

Central Funding Cuts and Neglected Schemes

The BJP-led central government has reduced grants to Odisha by 18.19%, from ₹21,011 crore in 2023–24 to ₹17,089 crore in 2024–25. Flagship agricultural schemes have been slashed to the bone—PMKSY assistance has been cut from ₹146 crore to ₹32 crore, and RKVY has been reduced to zero from ₹232 crore.

The much-publicised promise of a ₹3,100 per quintal paddy procurement price remains unfulfilled. The pledge to transfer subsidies within 48 hours via DBT is also unmet, causing severe cash flow problems for farmers. While the government has introduced AI-based grain analysers and mobile cleaning machines, coverage is grossly inadequate—only 200 machines for over 600 mandis.

Paddy Procurement Irregularities and Corruption

The exploitative “katni-chhatni” practice, involving unofficial deductions of 9–10 kg per quintal, continues despite promises to abolish it. Only 200 mandis have electronic weighing machines, leaving most farmers vulnerable to manual manipulation. The token distribution system is opaque, and rice millers wield undue influence, fuelling corruption.

From December 2024 to January 2025, several districts—including Ganjam, Puri, and Kendrapara—suffered massive crop losses due to the failure of the early warning system. This has driven a tragic rise in farmer suicides, underscoring the urgency for both disaster preparedness and mental health support.

The agriculture department’s budget is being consumed almost entirely by paddy procurement and CM KISAN payouts. Critical needs—like crop diversification, natural farming, and post-harvest infrastructure—receive no attention. No new cold storage plants have been built despite repeated demands.

KALIA vs CM KISAN: Shrinking Support

The inclusive KALIA scheme once supported over 64 lakh beneficiaries, including tenant farmers and landless labourers. CM KISAN has reduced the coverage to 50 lakh and excludes many who need it most. At ₹6,000 per year, the assistance fails to keep pace with rising input costs, while Aadhaar-linked banking requirements leave many rural farmers out of reach.

A Procurement Crisis on the Ground

In Sambalpur and other western districts, paddy-laden trucks are stranded at mandis, exposed to unseasonal rains that destroy grain quality and income. The government’s procurement targets are inconsistently applied, with many token-holding farmers turned away. Rice mills are also facing a storage crisis, with 70,000 quintals of old stock blocking new intake.

From Bargarh to Ganjam, farmers are battling fertilizer shortages and rampant black-market sales. Prices are inflated far above government rates, and weak distribution systems worsen the crisis, jeopardizing the coming kharif sowing season.

Policy Prescription to Arrest Degrowth

The BJP government must honour its promises to the farming community, overhaul the procurement system to end corruption, and revive inclusive schemes like KALIA. Investments should focus on diversification beyond paddy, irrigation infrastructure, and market linkages to build resilience. The paddy procurement deadline must be extended, and all grain purchased without exploitative deductions, as promised by Chief Minister Mohan Charan Majhi.

If Odisha’s agriculture is allowed to wither under neglect, cuts, and corruption, it will not just be farmers who suffer—the entire rural economy will face a slow collapse.

(This is an opinion piece, and views expressed are those of the author only)

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