The Agriculture Department is planning a tie-up with banks to avoid delays in reimbursing vegetable farmers on procurement of their produce.
The proposal is meant as a solution to the payment delays for which the department and its procurement and marketing agency, the Kerala State Horticultural Products Development Corporation (Horticorp), have been drawing flak from farmers.
The department has conducted one round of discussions with senior officials of the State Bank of India (SBI) and they have, in principle, agreed to the proposal, Minister for Agriculture P. Prasad told The Hindu. The method under consideration is identical to the one employed by the Kerala State Civil Supplies Corporation (Supplyco) for paddy procurement where farmers get paid through banks on production of paddy receipt sheets.
''It will help to avoid the complaints regarding payment delays by Horticorp,'' Mr. Prasad said of the proposal. For the tie-up with the SBI, a draft memorandum of understanding is under preparation, he said. In due course, the department hopes to have more banks on board.
In the initial phase, the scheme will be piloted in selected locations and will apply to the 16 vegetables and fruits for which base prices are officially in place.
That said, the proposal involves certain challenges that need to be surmounted before it can be successfully implemented, a senior official of the Horticorp said. Unlike the case of paddy, the scheme for vegetables needs to factor in the higher frequency of procurement and the multiplicity of items.
Horticorp has been engaged in the procurement and marketing of vegetables for helping out farmers in the State. However, it had run up payment dues, drawing sharp criticism from farmers and farmer groups. In July, the department had informed the State Assembly that the drop in Horticiorp revenues due to natural calamities and the COVID-19 outbreak had caused the delay.