THIRUVANANTHAPURAM: Cabinet meeting has given approval to Supplyco to continue as the nodal agency for paddy procurement. The decision of the last cabinet to procure paddy through primary cooperatives has been cancelled.

However, the cabinet and the cabinet sub-committee, which was later formed, could not take a decision regarding the financial assistance for the procurement. The Chief Secretary put forward an alternative proposal of Rs 100 crore, but it was not fully accepted.

The decision of the last cabinet meeting was to give the rice collected by the cooperatives to the mills and give it to Supplyco and to limit the responsibility of Supplyco only to rice marketing. CPI ministers opposed this move yesterday. They pointed out that central financial assistance for paddy procurement would not be available and this would lead to audit problems.

Rs 1055 crores is owed by the state government to Supplyco for procurement of paddy. The CPI ministers in the sub-committee also took the stand that it is not acceptable to keep Supplyco in this position.

Another Rs 2500 crores is also owed to the bank consortium in relation to paddy procurement. The chief minister suggested that the arrears should not be on such a level and that the crisis should be overcome quickly.

The financial arrangement between SupplyCo and the consortium of banks will continue till there is a restructuring in view of the limitation for Kerala Bank. The Department of Agriculture will be instructed to fill up all the deputation vacancies of officers handling paddy storage in SupplyCo in a timely manner.

Cash through PRS loan

The farmers will be paid for the stored paddy through PRS loans. Rs 200 crore granted by the government to Supplyco the other day will be used to repay the existing PRS loans in the consortium banks.

Funds available from state and central governments will be used to repay PRS loans and take new ones. Supplyco should ensure timely disbursement of money to farmers. The committee chaired by the Chief Secretary will be tasked to ensure this.