Kerala Extends Paddy Procurement Pact with Banks to Ease Farmer Payments

Agriculture Minister T. Siddique confirms the renewal of the state's procurement agreement with public sector banks to streamline crop collection and credit cycles.

KOZHIKODE – Addressing a ‘Meet the Press’ event at the Calicut Press Club, Kerala Agriculture Minister T. Siddique announced that the state government has officially renewed its paddy procurement agreement with public sector banks. This move aims to stabilize the procurement process, which had faced uncertainty following the expiration of the previous contract on March 31. Under the current framework, the Kerala Civil Supplies Corporation (Supplyco) remains the primary agency responsible for purchasing grain from cultivators.

The procurement mechanism relies on a system of bank loans facilitated by the issuance of Paddy Receipt Sheets (PRS). Once farmers receive these receipts for their harvested yield, public sector banks provide the necessary credit. The state government then assumes the responsibility of repaying both the principal and accrued interest to the financial institutions. While Minister Siddique acknowledged that these repayments have historically faced delays, he emphasized that the current government is committed to rectifying procedural bottlenecks to ensure smoother transactions for the farming community.

Coordinating Procurement Efforts

To address the logistical challenges inherent in the procurement cycle, a ministerial sub-committee—comprising Minister Siddique, Food and Civil Supplies Minister Anoop Jacob, and Cooperation Minister M. Liju—was formed following the UDF government’s first cabinet meeting. This committee has been tasked with expediting the remaining collection process before the arrival of the monsoon season. Despite the operational shift away from the experimental cooperative-led model previously utilized in Palakkad, the government maintains that Supplyco is well-positioned to handle the logistics entirely.

While the government works to finalize the current season's intake, the broader agricultural sector in the state continues to face significant hurdles. Reports from regions like Kuttanad indicate that farmers remain hesitant to begin second-crop cultivation, citing outstanding government dues totaling approximately ₹299.5 crore. These lingering arrears, combined with long-standing complaints regarding a lack of compensation for crop losses since 2021, underscore the mounting financial pressure on growers.

Addressing Farmer Concerns

Minister Siddique noted that the Food and Civil Supplies department is actively working to resolve grievances regarding the moisture content specifications, which often affect the valuation of paddy brought to procurement centers. Beyond immediate relief measures, the administration is shifting its focus toward long-term policy adjustments, including initiatives designed to encourage greater participation of women in the agricultural workforce.

Though national-level discussions regarding central schemes—such as the recent release of the 8th installment of the PM-KISAN benefits—continue to dominate agricultural discourse, the immediate focus for Kerala’s administration remains the clearing of internal payment backlogs. By prioritizing the renewal of banking partnerships, the government hopes to restore confidence among producers who have been navigating a difficult period of debt and shifting procurement protocols.