Workers clean rice paddy at an Agricultural Produce Market Committee wholesale market in Jalandhar, Punjab, India. (Photographer: Dhiraj Singh/Bloomberg)

Cabinet Approves Scheme To Ensure Minimum Support Price For Farmers

The Union Cabinet today approved an umbrella scheme to ensure remunerative prices to farmers for their produce.

Named ‘Pradhan Mantri Annadata Aay SanraksHan Abhiyan’, the scheme’s launch follows the government’s announcement in this year’s budget to increase the support prices of kharif crops to 1.5 times that of the crop’s cost, it said in a release. The government has proposed doubling farmers’ income by 2022.

The cabinet, chaired by Prime Minister Narendra Narendra Modi, also approved an additional government guarantee of Rs 16,550 crore for the scheme, taking the total of such guarantees to Rs 45,550 crore.

The cabinet also sanctioned three sub-schemes for procurement: price support scheme, price deficiency payment scheme and a pilot of the private procurement and stockist scheme.

The government mentioned that one of the sub-schemes, the PDPS, is on the lines of the Madhya Pradesh government's Bhavantar Bhugtan Yojana, but the former will protect oil seed farmers only. Shobhana Pattanaik, agricultural secretary said that while the minimum support price scheme has always existed, PM-AASHA addresses the problem of low price in almost all the 23 crops mandated by the minimum support price scheme. “ The entire spectrum of pulses will be covered under the price support scheme which has been tweaked to take care of ground realities,” he added.

Key Highlights

  • A sum of Rs 15,053 crore has been sanctioned for its implementation. Budget provision for crop procurement has been increased.
  • Price support scheme, physical procurement of pulses, oil seeds and copra will be done by central nodal agencies with proactive role of state governments.
  • The Food Cooperation of India will take up PSS operations in states/districts.
  • Expenditure and losses due to procurement will be borne by the central government as per norms.
  • Price deficiency payment scheme will cover all oil seeds for which the minimum support price is notified.
  • The scheme ensures direct payment of the difference between the MSP and the selling/modal price to pre-registered farmers selling their produce in the notified market yard through a transparent auction process.
  • Under the scheme, payments will be made directly with the farmers’ registered bank accounts.
  • For oil seeds, states have the option to roll out private procurement stockist scheme on pilot basis in selected districts/agricultural produce marketing committees of districts involved in the participation of private stockists.
  • The pilot will cover one or more crop of oil seeds for which MSP is notified.
  • Existing schemes of Department of Food and Public Distribution for procurement of paddy, wheat and nutri-cereals/coarse grains will continue.
  • Ministry of Textile’s procurement schemes for cotton and jute will continue to provide MSP to farmers.

Despite the wide range of commodities covered under the scheme, former Agriculture Secretary Siraj Husain believes that there will be farmers who will not benefit from the scheme. “There are states like Bihar, Jharkhand, parts of West Bengal, eastern Uttar Pradesh where the procurement infrastructure is weak. It is unlikely that National Agricultural Cooperative Marketing Federation of India Ltd. will be able to go to these areas and procure substantial quantities of maize, jawar, bajra or oil seeds,” he said.

The umbrella scheme encourages private participation of players in procurement of produce and to aid a wider reach. NAFED is the top organisation of marketing cooperatives for agricultural produce in India, under the Ministry of Agriculture, Government of India.