Kerala's Paddy Processing Challenge: Negotiating the Out-Turn Ratio

Kerala's Chief Minister Pinarayi Vijayan announced a potential compensation of Rs 63.37 crore for paddy processing mill owners due to the out-turn ratio (OTR) set by the central government. The state lacks authority to alter this ratio and will seek central intervention for resolution.

Kerala's Chief Minister Pinarayi Vijayan declared that the cabinet is considering a compensation package of Rs 63.37 crore for paddy processing mill owners. This move addresses challenges associated with the central government's fixed out-turn ratio (OTR) of 68 percent for the 2022-23 procurement year.

In a statement following a meeting with the mill owners, Vijayan emphasized that Kerala cannot unilaterally change the OTR and must comply with the central directive. OTR determines the amount of rice produced from each quintal of paddy, a critical factor in procurement.

The state government plans to request central intervention to alleviate procurement difficulties and intends to address compensation for millers' losses due to the ratio from 2025-26 onward. Transportation charges related to paddy are also under discussion for government reimbursement.

(With inputs from agencies.)