Minister for Agriculture P. Prasad has criticised a letter from the Union government demanding that Kerala discontinue the State Incentive Bonus provided by it for paddy procurement.
The State implements a model decentralised paddy procurement scheme, the Minister said at a press conference here on Wednesday.
The paddy cultivated in the State, he said, was fully procured by the government at ₹30 a kg, which included the minimum support price (MSP) of ₹23.69 and the State Incentive Bonus of ₹6.31.
The average productivity of paddy in the State was 3,006 kg a hectare (ha) against the national average of 2,899 kg. This was made possible owing to the support given to paddy farmers by the government.
It was against this backdrop that the Expenditure Secretary in the Union Finance Ministry had written to the Kerala Chief Secretary seeking that the State stop providing the State Incentive Bonus, the Minister said.
According to the letter, bumper production of paddy and wheat had resulted in stocks far in excess of requirements of the public distribution system and buffer norms. The surplus rose every year, creating a recurrent burden on the public exchequer. The announcement of additional bonus on paddy (and wheat), over and above the MSP, would result in higher sowing and production of foodgrain. Disproportionate cultivation of of paddy cultivation had serious implications for sustainability, climate resilience, and public health. At the same time, inadequate domestic production of oilseeds and pulses was compelling higher imports. In such a situation, the Kerala government should consider “discontinuing the bonus” and shift attention towards incentives to promote pulses, oilseeds, and millets.
The Minister argued that the Union government was portraying the increase in production of paddy as a burden and demotivating farmers. This was part of a planned move to reduce production of paddy and increase imports of oilseeds and pulses in the wake of the India-U.S. trade deal.
Agriculture was on the State List and comprehensive discussions should be held with States on any trade agreement that impacted the farm sector. However, no such talks were held, the Minister said.
Import of foodgrain, even in limited quantities, would pose a serious threat to the livelihood of farmers in the country, the Minister said, demanding that the Union government withdraw from the trade deal with the U.S.
Published – February 04, 2026 08:56 pm IST
