The Centre had recently fixed Minimum Support Price (MSP) for fine quality paddy and the common variety at Rs 1,450 and Rs 1,410 per quintal, respectively.
"Considering the welfare of farmers, the state government will provide an additional Rs 70 for the fine quality paddy and procure it at Rs 1,520 per quintal," Chief Minister J Jayalalithaa said in a statement.
Similarly, an additional Rs 50 will be provided to the MSP of Rs 1,410 for the common variety to procure paddy from farmers at Rs 1,460 per quintal, she added.
Further, the CM said she had directed extending sale of toor dal, urad dal and palm oil through the Public Distribution System for one more year, considering the "high rates" of pulses and cooking oil in the open market.
She said the fair price shops had been selling pulses at Rs 30 a kg each while palm oil was priced at Rs 25 a litre for the ration-card holders and the extension was being done keeping in mind the welfare of the poor and middle classes.
The move will result in a Rs 2,000 crore annual expenditure on the state exchequer, she added.