Govt. offers cheaper credit to millers to stabilise paddy market

In an effort to support the farmgate prices and strengthen market liquidity, the government yesterday announced the launch of a concessional loan scheme for the small and medium-scale paddy millers and cooperative societies to finance the paddy purchases during the 2026 Yala harvesting season.

The Finance Ministry said the eligible millers and cooperatives can obtain loans of up to Rs.75 million, at an annual interest rate of 8 percent, with a repayment period of 180 days. The scheme took effect on July 1.

The facility is available to the SME paddy millers and cooperative societies, with a maximum daily milling capacity of 25 metric tonnes. The borrowers are required to hold valid business registrations and licences issued by the Paddy Marketing Board.

The government said the programme is introduced to ensure the farmers receive a reasonable price for their harvest by improving the ability of the millers and cooperatives to purchase paddy during the peak harvesting period. Sixteen banks and financial institutions have been selected to participate in the scheme, including the state-owned lenders.

The ministry said the paddy purchased under the scheme would be bought at the minimum purchase price declared by the Agriculture Department, a measure aimed at protecting the farmer incomes during the harvest season.