BHUBANESWAR: In a financial mess due to non-release of commission charges towards paddy procurement by the state government for the past three years, primary agriculture cooperative societies (PACS) and the large area multi-purpose cooperative societies (LAMPCS) have been diverting recovered loans from farmers to meet expenses incurred on purchase of paddy under minimum support price system.
With over Rs 1,000 crore outstanding towards commission and mandi handling charges, the National Bank of Agriculture and Rural Development (NABARD), refinancing agency for short-term and medium-term loan to agriculture and allied activities, has raised an alarm. It has reported to the state government that the cash imbalance position of PACS/LAMPCS has crossed a whopping Rs 3,500 crore.
The Odisha State Civil Supplies Corporation (OSCSC), nodal agency for procurement of paddy, has not released the commission charges (two per cent of the total transaction) to the PACS and LAMPCS for the last three years while their mandi handling charges are pending for the last six years.
“As paddy commission for the last three years and mandi handling charges for last six years, amounting to more than Rs 1,000 crore, have not been reimbursed by OSCSC, the PACS are diverting the loan collection money towards the expenses for paddy procurement which has led to imbalance position as indicated in report given by NABARD,” said the Registrar of the Cooperative Societies (RCS) in an official communication to the state government on Wednesday.
Expressing concern over the unfair practice of utilisation of money recovered from loanee farmers for other purposes, the RCS said that non-release of paddy commission and mandi handling charges has eroded the financial health of PACS.
As the primary societies are engaged in paddy procurement, the grassroot-level organs of the short-term cooperative credit structure have deviated from original mandate of financing term loans and collection of loan resulting in poor performance in lending business.
Not paid dues for three yrs, PACS use up recovered loan
Sources in the Cooperation department said that the commission of the PACS/LAMPCS should be released to OSCB in two phases, in May for kharif paddy procurement and in September for rabi procurement. The PACS are paid commission at the rates fixed by OSCSC and in consonance with the decision of the Food Corporation of India (FCI).
Attributing the delay in the release of PACS charges to the huge pending food subsidy bill with the central government, sources in OSCSC said, the corporation is always under financial stress due to high market exposure and payment of high interest rates.
Though the central government on Tuesday said it has released Rs 2,085 crore out of the pending food subsidy bill of more than Rs 14,249 crore till February, neither the corporation not the government have confirmed the receipt of the payment.