Kerala farmers embarrassed as budget ignores support price for paddy

Kottayam: Kerala's paddy farmers, in the middle of harvesting their third crop of the year, are frustrated with the state government for not allocating funds in the 2025-2026 Budget for the incentive bonus, which is the state’s share in the paddy procurement price.

The paddy procurement price combines the Union government’s Minimum Support Price (MSP) and the state government’s incentive bonus. Over the past five years, the state government has reduced its incentive bonus by almost the same amount the Union government raises the MSP, keeping paddy farmers' earnings stagnant.

Currently, farmers are harvesting the Puncha crop, cultivated in deep wetlands after the Virippu (first) and Mundakan (second) harvests. This year, the Union government increased the MSP by Rs 1.17 to Rs 23. The state government delayed its decision on the incentive bonus until after the byelection in November, then cut its share by Rs 1.17 to ₹5.20, keeping the procurement price unchanged at Rs 28.20 per kg.

Since 2022-23, the procurement price has remained at Rs 28.20 per kg because the state government reduces its share every time the Union government increases the MSP, said a farmer in Kottayam. In 2023-24, the state incentive bonus was Rs 6.37. In 2022-23, it was Rs 7.80, and the year before, it was Rs 8.60 per kg.

Farmers had hoped the state government would increase its share and raise the procurement price to at least Rs 30 per kg to cover the rising cost of production.

Currently, SupplyCo, the government’s procurement agency, pays farmers Rs 28.32 per kg, which includes a handling charge of 12 paise.

Farmers registered with Kottayam SupplyCo expect the Puncha harvest to reach 47,000 tonnes. So far, 6% (around 2,320 tonnes) has been harvested. Although the government has allowed SupplyCo to procure 3,260 tonnes, only 511 tonnes have been procured so far, farmers said.