Why in news?
Cabinet Committee on Economic Affairs approved the implementation of “Pradhan Mantri Annadata Aay Sanrakshan Abhiyan” (PM-AASHA) recently.
What does the scheme contain?
- It aims to provide minimum support price (MSP) assurance to farmers.
- The new scheme has three components —
- Price Support Scheme (PSS)
- Price Deficiency Payment Scheme (PDPS)
- Pilot of Private Procurement & Stockist Scheme (PPPS).
- It clubs together the existing procurement schemes with newly introduced options.
- PDPS has been framed on the lines of the Madhya Pradesh government’s Bhavantar Bhugtan Yojana (BBY) to protect oilseed farmers.
- Under this, farmers will be compensated to the extent of difference between MSP and market price subject to a ceiling price which may not exceed 25% of the MSP.
- Under PPPS, the selected private agency shall procure oilseeds at the MSP from the registered farmers whenever prices in the market fall below the notified MSP.
- A maximum service charge of up to 15 per cent of the notified MSP will be payable to the agency as an incentive.
- This is similar to PSS in the physical procurement of the notified commodity, it will only substitute PSS in the pilot districts.
What are the challenges?
- Under the MSP policy, the government fixes the rates for 23 notified crops grown in kharif and rabi seasons.
- MSP was set at 50% higher than the farmers’ production costs this year, including labour cost to give remunerative prices to the farmers.
- However, most of the 21 other crops are sold at market prices, often below the MSP, as the government’s procurement operations are temporary.
- Though the government has increased the procurement of pulses and oilseeds at MSP under the existing PSS, it was way below the production target.
- For example, NAFED procured 31.9 lakh tonnes of pulses and oilseeds at the MSP in 2017-18, though the total production of pulses and oilseeds was estimated at 240 and 300 lakh tonnes respectively.
- Also PDP experiment in Madhya Pradesh shows, cartelisation was witnessed, wherein traders forced farmers to take lower prices from them on account of compulsory compensation from the government.
- It also ends up helping traders and lower level mandi functionaries more than the farmers, despite best intentions of the government.
What holds the key in successful implementation of the scheme?
- Registration of all the farmers, especially small and marginal ones, must be ensured so that they receive their compensation on time.
- Proper monitoring of the marketing system should be ensured, as in e-NAM, so that it will check rich farmers from exploiting the system.
- It also depends on how effective the states will be in checking the manipulative practices of the traders.
Source: Business Line, The Hindu