Kerala urges Centre to release pending funds before Onam
Kerala
's pending share of procurement price for paddy before
Onam
. He warned that the state was facing a heavy financial burden as it was forced to fully fund paddy payments to farmers.
He said that since 2017-18, the state has not received the central allocation. A total of Rs 2,601 crore is due to Kerala, including Rs 1,259 crore from earlier years and Rs 1,342 crore for the 2024-25 procurement year under the minimum support price (MSP) scheme, he added.
"The practice until recently was to submit claims to Centre every three months, with provisions for advance payments. From the 2025-26 procurement year, however, Centre withdrew the advance system and directed states to file claims monthly.
Kerala has already submitted claims worth Rs 159 crore for April and May 2025," said Anil.
Paddy procurement in the state takes place under Centre's decentralised grain procurement scheme, where MSP is fixed and funded by the Union govt. Kerala additionally pays an incentive bonus to farmers, making paddy prices in the state the highest in the country. For the first crop of 2024-25, 1.45 lakh metric tonnes of paddy were procured from 57,529 farmers, and Rs 412.4 crore was fully disbursed.
For the second crop, completed in July, 4.35 lakh metric tonnes were procured from 1,49,615 farmers.
Of the Rs 1,232 crore payable, Rs 873 crore has already been disbursed.
"Overall, of the Rs 1,645 crore payable for the year, Rs 1,285 crore has been released. The remaining Rs 359.36 crore will be fully disbursed before Onam," Anil assured.
The minister said state govt had to divert funds earmarked for the incentive bonus towards meeting procurement price obligations.
He added that Rs 577.5 crore allocated in the 2024-25 budget and Rs 606 crore set aside for 2025-26 have already been used for this purpose.
Incidentally, paddy farmers in Palakkad observed Chingam 1 as a 'Betrayal Day' and protested in front of the Krishibhavans on Sunday. In Palakkad town, they organised a symbolic 'kettuthali' (mangalsutra) protest, sporting it as a symbol of their financial crisis.
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