Centre releases letter, FM Nirmala rebuts Stalin as row over paddy incentives intensifies

CHENNAI: Union Finance Minister Nirmala Sitharaman on Monday released a key communication sent to states on crop incentives, rejecting Chief Minister and DMK president M K Stalin’s charge that the Centre was seeking to curb support for paddy farmers, and accusing him of misrepresenting a policy advisory.

The move came after Stalin publicly cited the letter to argue that the Centre had urged Tamil Nadu to reconsider and discontinue the additional bonus paid to paddy farmers. “In the letter your Ministry sent to the Chief Secretary of Tamil Nadu, it is clearly stated that since the State’s additional bonus for paddy has led to bumper production, the State government should consider discontinuing the bonus,” he said, adding, “I have not stated anything that is not present in that letter.”

He further questioned the Centre’s stand, noting that while Nirmala Sitharaman had said states were free to decide bonuses over MSP, the communication explicitly called for a review of the existing policy. “If your current claim is true, will you place that letter in the public domain?” Stalin asked.

The letter, issued by the Department of Expenditure, flagged that surplus production of rice and wheat had led to excess stocks, imposing a recurring fiscal burden and exacerbating environmental stress. It pointed to groundwater depletion, soil degradation and stubble burning linked to water-intensive crops, and urged states to shift incentives towards pulses, oilseeds and millets to address domestic shortages and reduce import dependence.

Responding, Nirmala Sitharaman said the communication was a constructive suggestion aimed at strengthening long-term food security. “Building food security requires constructive, continuous engagement with all stakeholders,” she said, accusing Stalin of creating false narratives and attempting to draw a wedge between the Centre and states.

She emphasised that reliance on imports for essential commodities like edible oils and pulses exposed India to global shocks. “Expanding domestic production of pulses and oilseeds is not only an economic necessity but also a strategic need,” she said, adding that farmers could benefit from better price realisation in deficit crops.

Stating that most states had responded positively in the spirit of cooperative federalism, Nirmala Sitharaman said the communication was an invitation to share responsibility rather than a directive. She also took a swipe at Stalin for challenging the Centre to release the letter, saying it had now been made public.