State to continue incentive bonus for paddy farmers despite Centre’s report

THIRUVANANTHAPURAM: The Kerala government has rejected a central government report that advised against giving additional bonus payments to paddy farmers.

The Union Finance Ministry’s Expenditure Secretary informed the State Chief Secretary that paddy production is higher than required and that the cost of procurement and storage would become a burden on the public exchequer. The Centre suggested that Kerala stop giving the additional incentive bonus for paddy and instead promote the cultivation of pulses and millets. However, the state government has decided to officially inform the Centre that the incentive bonus will continue.

The state argues that agriculture is under the jurisdiction of the state government. Therefore, the Centre has no authority to direct it to stop paying bonuses to farmers.

With elections approaching, the LDF government is also expected to use the issue politically against the Centre. Agriculture Minister P. Prasad earlier alleged that the Opposition showed neglect towards farmers by boycotting the Assembly on the day the issue was to be raised during Question Hour.

Support price and incentive bonus
Under the procurement scheme, paddy is collected from farmers, processed, and distributed to ration beneficiaries. The Minimum Support Price (MSP) for paddy is fixed by the central government. Kerala provides an additional incentive bonus because farmers have complained that the MSP fixed by the Centre is insufficient.

At present, the MSP for paddy is Rs 30 per kilogram.

Farmers receive Rs 30 per kilogram for paddy
Central share: Rs 23.69
State incentive bonus: Rs 6.31

Incentive bonus distributed

2021–22: Rs 643.63 crore
2022–23: Rs 570.32 crore
2023–24: Rs 356.31 crore
2024–25: Rs 301.82 crore

"The Centre’s current stance reflects its approach towards farmers"
-P Prasad, Agriculture Minister

"The state will continue giving the bonus. Kerala is providing the additional payment as the Swaminathan Committee’s recommendation, to fix the support price at least 1.5 times the cost of production, has not been implemented"
-G.R. Anil, Food Minister