Kerala govt. considers processing centres under Supplyco to end millers’ monopoly in paddy procurement: Food and Civil Supplies Minister

Food and Civil Supplies Minister Anoop Jacob announced in the State Legislative Assembly on Monday that the government will evaluate the feasibility of establishing its own modernised, centralised procurement and processing centres under Supplyco to end the absolute reliance on private millers and shield farmers from exploitation in paddy procurement.

Mr. Jacob was responding to concerns raised during the Question Hour over private mills allegedly forcing unfair paddy weight deductions on farmers, sometimes up to 15 kg per quintal, under the pretext of weather-related damage, and thereby directly flouting the Central government requirement of a 68%-outturn ratio (OTR). Non-compliant private mills are presently being subjected to inspections, the Minister said.

He informed the House that the United Democratic Front (UDF) government has disbursed nearly ₹217 crore to farmers via Paddy Receipt Sheet (PRS) loans through Supplyco.

‘LDF scheme backfired’

Responding to questions raised by legislators, including A.D. Thomas and V.T. Balram of the Congress, Mr. Jacob detailed why a pilot scheme introduced by the previous Left Democratic Front (LDF) government had backfired and triggered procurement delays. The administration had then entrusted Primary Agricultural Cooperative Societies (PACS) with distributing PRS loans for the 2025-26 second crop season.

However, the decision delayed paddy procurement in Palakkad by nearly two months since it was implemented after the procurement season had already commenced. Out of 74 cooperative societies that signed up for the scheme, only 31 banks with sufficient funds could actually disburse payments.

“The project was rolled out without ensuring the necessary infrastructure, financial backing, technical integration or operational experience. Besides, the system failed when the special assistance expected from Kerala Bank failed to materialise,” he said.

Back to consortium

In order to salvage the ongoing season, the UDF government excluded PACS from the procurement system and reverted to the process involving the SBI-Canara Bank consortium. Besides, the government has raised the loan limit from ₹1,200 crore to ₹1,600 crore to ease the financial bottleneck that has plagued the sector.

Responding to former Food and Civil Supplies Minister G.R. Anil’s question regarding outstanding dues, Mr. Jacob said the previous government left behind a liability of ₹702 crore in unpaid dues to paddy farmers.

Moreover, the State is yet to receive ₹320 crore from the Central government. He attributed this delay to a backlog in submitting audited accounts to the Centre. Supplyco has been strictly directed to complete and submit all pending audits within the next six months to claim the Central allocation, he added.