KERALA SAYS CENTER OWES PADDY FARMERS ₹2,601 CRORE IN MSP MONEY
THIRUVANANTHAPURAM, Kerala, India – August 18, 2025:Kerala’s government is accusing the Central government of holding back a huge ₹2,601 crore in Minimum Support Price (MSP) payments that it owes to the state’s rice farmers. This money fight has been brewing for months and is now seriously hurting farmers who are already struggling. The total includes unpaid bills going back to 2017-18, plus a big chunk for the most recent 2024-25 harvest season.
The Money Problem
Kerala’s Food and Civil Supplies Minister, G.R. Anil, said at a press conference that the total amount due is in two parts: ₹1,259 crore is from way back in 2017-18. ₹1,342 crore is for rice bought this season.
The minister said that the central government hasn’t sent a single rupee for this season, even though they’ve asked for the money repeatedly. He said they’re still waiting on ₹159 crore for April and May 2025, which is making it hard for the state to pay farmers on time.
How MSP Works in Kerala
Kerala’s system for buying rice is tricky. It involves the state government, banks, and the central government. A state agency called Supplyco buys rice from farmers at a price that includes the Centre’s MSP and extra money from the state.
To pay farmers quickly, Supplyco uses something called the Paddy Receipt Sheet (PRS) loan program. Banks loan farmers money based on these sheets, so farmers get paid right away instead of waiting for the Centre to send money.
The State’s Trouble
The state government has to pay back the loans and interest. Kerala has always been proud of this because it protects farmers from debt. But because the Centre is taking so long to pay, it’s putting a lot of pressure on the state’s finances.
Kerala’s Finance Minister, K.N. Balagopal, has kept bringing this up, saying the state is pushed to the wall because the Centre is being difficult and denying payments on flimsy grounds. He thinks the Centre is not treating the state fairly.
The Center’s Side
The central government hasn’t given a direct response to Kerala’s claims. But officials from the Ministry of Consumer Affairs, Food, and Public Distribution have said that they release money to states after they get all the right documents and the rice meets certain quality standards.
The Centre has also talked about direct payments to farmers, saying it makes sure payments go out quickly. In the past, Central government officials have blamed delays on states not sending in the necessary paperwork and bank details on time. So, the two sides are blaming each other, and the farmers are stuck in the middle.
How It Hurts Farmers
The rice farmers in Kerala are the ones suffering most from this money mess. The loan system is supposed to help, but as the loans become due, farmers are feeling the pressure. They need the state government to pay back the loans so their accounts don’t get into trouble.
Because of the money problems, many farmers are getting into debt. There have been protests in places like Palakkad and Alappuzha, where farmers are very upset about the late payments. Many say they don’t want to plant their next crop because they’re afraid the same thing will happen again.
Background of the Fight
This isn’t the first time Kerala and the Center have argued about money. The current fight over MSP payments is part of a bigger disagreement about how money is shared. The state has said before that the Centre is cutting its share of tax money and limiting how much it can borrow, which is making it hard to fund projects and programs.
The MSP payment issue has been going on for a while, with unpaid bills dating back to 2017. But this situation is worse because of the huge amount of money involved and the state’s other financial problems. Kerala also says the Center’s quality rules for rice are too strict for its climate.
Politics and What It Means
This fight has become political. The ruling party in Kerala is accusing the Center of blocking money for political reasons. This is making the relationship between the two governments even worse.
The future looks bad for farming in Kerala. Rice farming has already been declining because of rising costs and labor shortages. The money problems farmers are facing could make things worse, which would threaten the state’s food supply and the jobs of many people in rural areas.
