Tamil Nadu Chief Minister C Joseph Vijay announced on Monday a steep increase in state procurement incentives for paddy and sugarcane farmers, lifting support payments to record levels just ahead of the September 1 start of the paddy procurement season, according to a PTI report published in The Hindu Business Line. Vijay made the announcement under Rule 110 in the Assembly, saying the decision was taken despite the state's financial position being "not good at present."
Paddy procurement incentives
With the paddy procurement season beginning on September 1, the state government's incentive will be increased to ₹289 per quintal for fine-grade paddy and ₹159 per quintal for common-grade paddy, on top of the central minimum support price, The Hindu Business Line reported. The procurement price will be ₹2,750 per quintal for fine-grade paddy and ₹2,600 per quintal for common-grade paddy.
"This is the first time in history that the state government has increased the incentive for paddy by more than ₹156 in a year," Vijay said, describing the increase as an unprecedented level in the history of Tamil Nadu.
Sugarcane procurement incentives
For sugarcane, the incentive will be increased by ₹709 per tonne, taking the total procurement price to ₹4,000 per tonne, the chief minister said. The report also cited a special incentive of ₹709.5 per tonne for sugarcane supplied in the 2025-26 milling year.
The Centre has fixed ₹3,290.50 per metric tonne for farmers who register with sugar mills and supply sugarcane in the 2025-26 milling year. The Tamil Nadu government will provide a special incentive of ₹709.5 per tonne on top of the central price, bringing the combined total to roughly ₹4,000 per tonne.
In the last five years, the special incentive for sugarcane was increased by only ₹156; now it has been hiked by ₹360.5 in the first year itself, according to the chief minister.
Government's stance and farmer welfare
Vijay said the government made this decision despite the state's financial position being not good at present, considering that the welfare of the farmers who cultivate paddy and sugarcane needs to be protected. He assured farmers that the state government will stand shoulder to shoulder with them in supporting their endeavours in agriculture and rural livelihood.
"We have decided to increase the state incentive for paddy and sugarcane to an unprecedented level in the history of Tamil Nadu, considering that the welfare of the farmers who cultivate paddy and sugarcane, needs to be protected." — C Joseph Vijay, Chief Minister of Tamil Nadu
Procurement incentives at a glance
| Commodity | Grade | State incentive | Procurement price | Season / Milling year |
|---|---|---|---|---|
| Paddy | Fine grade | ₹289 per quintal | ₹2,750 per quintal | Begins September 1 |
| Paddy | Common grade | ₹159 per quintal | ₹2,600 per quintal | Begins September 1 |
| Sugarcane | – | ₹709 per tonne increase; special incentive ₹709.5 per tonne | ₹4,000 per tonne (incl. Centre's ₹3,290.50 per metric tonne) | 2025-26 milling year |
Market benchmark for traders
For commodity traders and procurement teams, the revised incentive schedule provides concrete price benchmarks for Tamil Nadu's paddy and sugarcane procurement operations as the new season opens. The state-level incentive, added to the centrally fixed minimum support price for paddy and the Centre's sugarcane price, directly affects the cost basis for rice and sugar supply from Tamil Nadu. The announcement was published on August 10, 2026.
Sources:
