Vadakkencherry: Despite the Kerala State Co-operative Federation for Coconut Farming (KERAFED) allocating a certain amount for pending payments to coconut farmers, the mounting handling charges are causing further financial strain. The arrears for coconuts collected until May 5th were initially sanctioned, totaling approximately 5 crore rupees. However, almost this same amount has now become due once again.

KERAFED primarily procures coconuts through Self Help Group committees and cooperatives affiliated with the Vegetable and Fruit Promotion Council Keralam (VFPCK). Out of the 116 coconut procurement centers in the state, 74 are managed by VFPCK farmer markets (Swasraya Karshaka Samithis). The outstanding handling charges for these farmer markets have been accumulating since October 2022 and amount to around 9 crore rupees.

The financial situation of these farmer markets has reached a critical point due to the non-payment of administrative expenses. Currently, the farmer markets are relying on their turnover to cover these costs. However, unable to sustain this burden any longer, 15 markets in Palakkad have already halted procurement activities, and others are contemplating similar actions.

The affected entities submitted a petition to the Minister of Agriculture, requesting authorization for administrative expenses, but no favorable decision has been made thus far. Initially, it was agreed that when procurement through KERAFED commenced in June 2022, the government would cover the difference between the support price and market price, as well as the handling costs.

This has affected coconut procurement. As a result, coconut prices plummeted to Rs 20 per kg, even when the storage cost remains at Rs 34. 

To date, the government has provided Rs 3 crore, while KERAFED has already disbursed Rs 36 crore to farmers. According to the agreement, the government should bear the responsibility of paying 22 crores in it. Moreover, from June to September 2022, KERAFED has already spent approximately Rs 10 cr on handling expenses. These expenses also need to be reimbursed by the government.

If the government fails to provide the necessary funds, it is anticipated that KERAFED will be forced to suspend procurement activities by the end of June, as the financial burden becomes unsustainable. 

Despite assurances from KERAFED Chairman V Chamunni that the matter will be brought to the government's attention and steps will be taken to secure the required funds, no progress has been made thus far.