The markets for agricultural crops have always been segmented. Although agricultural price policy in India is largely focused on declaring minimum support price (MSP), for select crops at all Indian levels the price for any crop has hardly been unique for the country. In this context, the paper tries to understand how far prices of paddy have been different across states. To what extent such price policies, primarily the public procurement system, are instrumental in the determination of actual price differentials realized by farmers across states. The paper draws its analysis from unit-level data of the 77th round of the National Sample Survey on the situation assessment of farmers (2018–2019). The paper evaluates some of the possible factors such as government procurements of paddy, land ownership patterns, percentage of farmers selling in the regulated markets, among others, in the context of price determination of paddy. The paper also seeks the link between local market price and average price in the regulated markets in different states.