The Union Cabinet chaired by Prime Minister Narendra Modi on September 12, 2018 approved a new umbrella scheme ‘Pradhan Mantri Annadata Aay SanraksHan Abhiyan’ (PM-AASHA).
The scheme aims to ensure that farmers get remunerative prices for their produce as announced in the Union Budget for 2018. It will give a major boost to the pro-farmer initiatives of the Government.The Government had previously increased the MSP of Kharif crops by following the principle of 1.5 times the cost of production. The increase is expected to be translated to farmer’s income by the way of robust procurement mechanism in coordination with the state governments.
The umbrella scheme ‘PM-AASHA’ comprises three sub-schemes:
Price Support Scheme (PSS)
Price Deficiency Payment Scheme (PDPS)
Pilot of Private Procurement & Stockist Scheme (PPPS)
Under the scheme, the physical procurement of pulses, oilseeds and Copra will be done by Central Nodal Agencies with the proactive role of the state governments.
Further, in addition to NAFED, the Food Cooperation of India (FCI) will take up PSS operations in states and districts.
The procurement expenditure and losses due to procurement will be borne by the Union Government as per norms.
Under the scheme, it is proposed to cover all oilseeds for which minimum support price (MSP) is notified.
In this, direct payment of the difference between the MSP and the selling/modal price will be made to pre-registered farmers selling his produce in the notified market yard through a transparent auction process. All payments will be done directly into the registered bank account of the farmer.
This scheme does not involve any physical procurement of crops as farmers are paid the difference between the MSP price and sale or modal price on disposal in the notified market. The support of the central government for PDPS will be given as per norms.
The Cabinet also decided that the participation of private sector in procurement operation needs to be piloted so that on the basis of the learnings the ambit of private participation in procurement operations may be increased.
Therefore it was decided that for oilseeds, the states will have the option to roll out Private Procurement Stockist Scheme (PPSS) on pilot basis in selected districts and Agricultural Produce Market Committee’s (APMC) of district involving the participation of private stockiest.
The pilot district and selected APMC(s) will cover one or more crop of oilseeds for which MSP is notified.
Since this is similar to the PSS scheme, as it involves physical procurement of the notified commodity, the scheme shall substitute PSS/PDPS in the pilot districts.
The selected private agency shall procure the commodity at MSP in the notified markets during the notified period from the registered farmers in accordance with the PPSS Guidelines, whenever the prices in the market fall below the notified MSP and whenever authorised by the state or UT government to enter the market. The maximum service charges up to 15 per cent of the notified MSP will be payable.
The Cabinet has decided to give additional government guarantee of Rs16, 550 crore making it Rs. 45,550 crore in total.
In addition to this, budget provision for procurement operations has also been increased and Rs 15,053 crore is sanctioned for the implementation of PM-AASHA.
Rise in Procurement
During financial years 2010-14 total procurement was Rs 3500 crore only whereas during financial years 2014-18, it has risen 10 times and reached to Rs 34,000 crore.
For procurement of these agri-commodities during 2010-14, Government Guarantee of Rs 2500 crore was provided with an expenditure of only Rs 300 crore, while during 2014-18,
Guarantee amount has been increased to Rs 29,000 crore with an expenditure of Rs 1,000 crore.
• The Union Government is working with the holistic approach of solving any issue rather than in fragments.
• The Government has realised that increasing MSP is not adequate and it is more important that farmers should get the full benefit of the announced MSP.
• For the same, it is essential that if the price of the agriculture produce market is less than MSP, then in that case state governments and the central government should purchase either at MSP or work in a manner to provide MSP for the farmers through some other mechanism.
• With this approach, the cabinet approved the umbrella scheme of PM-AASHA with its three sub-schemes.
• The other existing schemes of Department of Food and Public Distribution (DFPD) for procurement of paddy, wheat and nutri-cereals/coarse grains and of Ministry of Textile for cotton and jute will be continued for providing MSP to farmers for these crops.
• In the Union Budget 2018, the Government had relayed its commitment to the vision of doubling farmers’ income by 2022.
• To enable the same, the government initiated several market reforms with emphasis on enhancing productivity, reducing the cost of cultivation and strengthening post-harvesting management, including market structure.
• The reforms include Model Agricultural Produce and Livestock Marketing Act, 2017 and Model Contract Farming and Services Act, 2018. Many of the Indian states have taken steps to adopt these through legislation.
• Further, efforts are on to set up a new market architecture to ensure that farmers get remunerative prices on their produce.
• The initiatives in this regard include setting up of Gramin Agricultural Markets (GrAMs) so as to promote 22,000 number of retail markets in close proximity of farm gate, competitive and transparent wholesale trade at APMC through eNAM and a robust and pro-farmer export policy.
• Other pro-farmers’ initiatives launched by the Government include implementation of Pradhan Mantri Fasal Bima Yojana, Pradhan Mantri KrishiSinchai Yojana, ParamparagatKrishi Vikas Yojana and the distribution of Soil Health Cards.
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