Palakkad: The attempt of the State government to resolve the paddy procurement imbroglio by taking the help of the Cooperative department is facing uncertainty. An amount of Rs 2,500 crore which Supplyco borrowed from a consortium of public sector banks by pledging the paddy procured during the last season and the crop that is yet to be harvested, has not been repaid. Hence, Supplyco will not be able to sign a fresh contract with cooperative banks.
There is also no clarity in the statements of Ministers who argue that the Cooperative department should also be involved in the process of paddy procurement. No decision could be arrived at even after the Ministers for Agriculture, Civil Supplies, and Cooperation conducted a round of discussions. Now, the farmers are pinning their hopes on a decision emerging at the meeting to be chaired by Chief Minister Pinarayi Vijayan on Wednesday. Meanwhile, some private rice mills have begun procuring paddy at lower rates.
The Kerala Bank has made it clear that it will not cooperate with the process unless Supplyco settles the outstanding dues of Rs 534.72 crore. Even if the paddy procurement process involves only financial transactions with the cooperative banks, it will need the government's assistance. Many of the cooperative societies functioning in the agriculture sector are not self-sufficient.
Let's check the stance of departments and banks here:
1. Civil Supplies department
Paddy procurement will continue under the aegis of Supplyco. The move to ensure payment to the farmers with the help of cooperative banks is being considered by the government. Since the work involves an extensive and complex process, the department is engaged only in financial matters with the Cooperative department.
2. Supplyco
Supplyco has not been officially informed that there would be any change in the present method of paddy procurement. The help of cooperative banks is also being explored among other possibilities for raising funds. However, there has been no decision yet on this issue. Obtaining funds from another consortium of banks can be considered only after settling the existing dues of Rs 2,500 crore.
3. Cooperative department
We have the responsibility of only releasing the money. Supplyco will look after all the other activities beginning with the procurement of paddy. Even if a cooperative society procures paddy in districts such as Palakkad, it should be handed over to rice mills designated by Supplyco. Kerala Bank will lend money to the cooperative societies that do not have the funds to pay the farmers. Kerala Bank is surfeit with money.
4. Kerala Bank
If the present dues are repaid, an amount of up to Rs 1,500 crore can be lent. Supplyco should raise the rest of the amount needed. There is no agreement for the Kerala Bank to lend money to the primary cooperative societies. Permission from the Reserve Bank of India as well as NABARD is required for sanctioning loans to the cooperative societies.
