Agriculture Minister P. Prasad criticized the Union Government’s letter demanding that Kerala stop the state incentive bonus it provides for the purchase of paddy fields.
The state is implementing a model decentralized procurement system for paddy rice, the minister said at a press conference here on Wednesday.
Rice grown in the state, he said, was fully procured by the government at ₹30 per kg, which included a minimum support price (MSP) of ₹23.69 and a state incentive bonus of ₹6.31.
Average rice productivity in the state was 3,006 kg per hectare (ha) against the national average of 2,899 kg. This was made possible by the support given by the government to paddy fish farmers.
It is in this context that the Minister of Expenditure in the Union Finance Ministry has written to the Chief Secretary of Kerala and requested that the State should stop giving the State Incentive Bonus, the minister said.
According to the letter, paddy and wheat production has resulted in large inventories exceeding public distribution system requirements and buffer standards. The surplus increased every year, repeatedly burdening the state treasury. Declaring additional paddy (and wheat) bonus beyond MSP would lead to higher sowing and production of food grains. The disproportionate cultivation of rice has had serious implications for sustainability, climate resilience and public health. At the same time, insufficient domestic production of oilseeds and pulses forced higher imports. In such a situation, the Kerala government should consider ‘ending the bonus’ and shift focus to incentives to promote pulses, oilseeds and millets.
The minister argued that the Union government is portraying the increase in paddy production as a burden and demotivating farmers. This was part of a planned move to reduce paddy production and increase imports of oilseeds and pulses as a result of the India-US trade deal.
Agriculture was on the state list and there should be comprehensive discussions with states on any trade agreement that had an impact on the agricultural sector. However, no such action took place, the minister said.
Import of food grains, 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 US.
Published – 04 Feb 2026 20:56 IST
