TNI Bureau: The Union Finance Ministry has raised objections to states giving bonuses or input subsidies to farmers on top of the Minimum Support Price (MSP) for paddy and wheat. In a letter to the Kerala Chief Secretary, the Centre said such payments are “inappropriate” and should be discontinued.

The ministry explained that due to high production of rice and wheat, government stocks have exceeded requirements for the Public Distribution System and buffer norms. Storing excess grain has become costly and burdensome on the exchequer. The Centre also warned that additional bonuses encourage overproduction of water-intensive crops, leading to groundwater depletion, soil degradation, environmental damage, and climate impact.

The letter, sent last month by Expenditure Department Secretary V. Vualnam to Kerala Chief Secretary Dr. A. Jayathilak, advised states to stop bonuses on paddy and wheat and instead promote pulses and oilseeds.

This move has raised concerns in Odisha, where farmers currently receive an ₹800 per quintal input subsidy on paddy. With the Centre’s clear opposition, farmers fear this support may be withdrawn in the coming seasons, including the upcoming rabi crop.

Earlier, the Odisha government had already indicated that not all farmers would receive the subsidy. During the last election, the Prime Minister and the BJP had promised procurement at ₹3,100 per quintal, which influenced farmers’ voting decisions. Many farmers now feel those promises are being diluted.

The Centre’s stance signals a likely end to input subsidies on paddy and wheat, affecting farmers across several states, including Odisha.