The Kerala government will press the Centre again for a subsidy on coconut oil. The Food and Civil Supplies Minister C. Divakaran said on Thursday that coconut oil should be treated as an edible oil. The subsidy was a must, especially in view of the signing of the ASEAN free trade agreement which would hit farmers hard.

The Minister told The Hindu that the Centre was providing subsidy for palmolein at Rs. 15 a litre. This benefit was actually going to foreign traders while 35 lakh coconut cultivators suffered the impact. Mr. Divakaran said that he had taken up the issue at the Food Ministers' Conference in Delhi on Wednesday.

The Union Minister for Agriculture, Consumer Affairs, Food and Public Distribution Sharad Pawar had replied that Kerala's demand was genuine and it should be taken up with the Union Finance and Commerce Ministries.

Coconut oil was now being treated as a raw material for the industry. He said that Kerala would be forced to lift grains allocated for the APL category at higher price during Onam festival. The Centre had cut the APL quota of rice which it was receiving at Rs. 8.90 a kg. Now, the State would have to pay Rs. 13.86 a kg.

The Centre was actually seeking the minimum support price paid to farmers plus the procurement expenses, which totalled Rs. 18.93 for a kg of rice. This was reduced after intervention by Prime Minister Manmohan Singh and Defence Minister A. K. Antony in the Cabinet subcommittee. He said that the Centre had agreed to increase the allotment of sugar which would enable the Government to provide 1 kg of sugar to 70 lakh ration card holders in the State during Onam.

Kerala, he said, has sought formation of a corpus fund for market intervention by the Centre and a subsidy of Rs. 150 crore from the Fund to the State at the conference. Kerala was now spending more than Rs. 400 crore for ration subsidies and market intervention.

The Minister said that Kerala could not accept the Food Security Act proposed by the Centre as it sought to reduce the number of BPL families and exclude APL families from the purview of public distribution. The Centre had promised to convene a meeting of Chief Minister to discuss the concerns of the States.