Context: Less than 3% of this season’s sanctioned amount of pulses and oilseeds have actually been procured so far under the once-hyped PM-AASHA scheme, Agriculture Ministry data show.
Prelims: Economic and Social Development Sustainable Development, Poverty, Inclusion, Demographics, Social Sector initiatives, etc.
- GS II- Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
- GS III-
- Major crops cropping patterns in various parts of the country, different types of irrigation and irrigation systems storage, transport and marketing of agricultural produce and issues and related constraints;
- Issues related to direct and indirect farm subsidies and minimum support prices;
Concerned ministry: Ministry of Agriculture & Farmers Welfare.
Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA):
- The Scheme is aimed at ensuring remunerative prices to the farmers for their produce as announced in the Union Budget for 2018.
- The increase in MSP can improve farmer’s income by strengthening the procurement mechanism in coordination with the State Governments.
Three Components of PM-AASHA:
- Price Support Scheme (PSS): Under the scheme, the physical procurement of pulses, oilseeds, and copra will be done by central modal agencies with a proactive role of state governments.
- NAFED, Food Cooperation of India (FCI) will also 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.
- The government will procure 25% of the marketable surplus of farmers for eligible crops.
- The Centre has made a provision of about Rs 16,000 crores to be provided as a bank guarantee for the agencies to procure from farmers.
- Price Deficiency Payment Scheme (PDPS): The scheme has been framed on the lines of Bhavantar Bhugtan Yojana, Madhya Pradesh government’s scheme as well as Bhavantar Bharpai Yojana of Haryana Government to protect the interests of oilseed farmers in the state.
- It will cover all oilseeds for which minimum support price (MSP) is notified. Pre-registered farmers will be directly paid the difference between MSP and selling or modal price for his produce in the notified market yard through a transparent auction process.
- All payments under it will be done directly into the registered bank account of farmers.
- It will involve any physical procurement of crops as farmers are paid the difference between MSP price and sale or modal price on disposal in the notified market.
- The central Government’s support of the central government for PDPS will be given as per norms.
- Pilot of Private Procurement & Stockist Scheme (PPSS): It will allow participation of the private sector in procurement operation needs on a pilot basis.
- Learnings from these outcomes will help to increase the ambit of private participation in procurement operations.
- Initially, it will be applicable to the procurement of oilseeds.
- States will have the option to roll out this scheme on a pilot basis in selected districts and APMCs of district involving the participation of private stockiest.
- The pilot district and selected APMCs will cover one or more crop of oilseeds for which MSP is notified.
- The scheme shall substitute PSS/PDPS in pilot districts as it is similar to the PSS scheme and involves the physical procurement of notified commodity.
- The selected private agency will procure commodity at MSP in notified markets during notified period from registered farmers in accordance with PPSS Guidelines, whenever prices in market fall below notified MSP and whenever authorized by state/UT government to enter the market.
- The maximum service charges up to 15% of the notified MSP will be payable.
Existing Procurement Schemes:
Other existing schemes of the Department of Food and Public Distribution (DFPD) for procurement of paddy, wheat, and Nutri-cereals or coarse grains and the Ministry of Textile for cotton and jute procurement will be continued for providing MSP to farmers for these crops.
What was the need for this scheme?
- Recently, the Centre announced a hike in MSPs for several Kharif crops. It said that it will pay farmers the cost of production (as determined by CACP) plus a 50 per cent ‘profit’ while procuring farm produce. But not many farmer groups were happy.
- Except for paddy, wheat, and select cash crops where there is direct procurement by the industry, government-driven procurement is almost nil in crops such as oilseeds, with the result that the MSPs remain only on paper.
- The Centre’s age-old procurement and MSP system need a relook because of its many shortcomings. Research by NITI Aayog and other research outfits has shown that the reach of the current MSP procurement system is very poor both in terms of geography and the crops covered.
- Despite thousands of crores of public money being spent in MSP operations every year, the farm crisis continues.
- The AASHA scheme tries to address the gaps in the MSP system and give better returns to farmers. It also promises to plug the holes in the procurement system through PDP.
- Unlike the current system where farmers repeatedly go for the few crops, such as paddy, wheat and sugarcane, where MSP is effective, the new scheme may ensure crop diversification and reduce the stress on soil and water.
Benefits of the schemes:
- The Price Support Scheme (PSS) promises to provide an assured price for farmers and protect them from making distress sale during bumper harvest.
- The scheme proposes to strengthen physical procurement of pulses, oilseeds and copra. State governments will be entrusted with the responsibility of deciding the type and quantity of the crop to be procured when wholesale prices fall below MSP.
- Besides, the State governments will also procure 25 per cent of the marketable surplus of farmers for eligible crops.
- Another scheme, Price Deficiency Payment Scheme (PDPS) promises to hedge price risks wherein farmers will be compensated for distress sale at prices below MSP.
- This scheme proposes to cover all oilseeds for which MSP is notified. Under this, the direct payment of the difference between MSP and the modal price of the market will be made to farmers.
- This scheme does not involve any physical procurement of crops by the State agencies as farmers are paid the difference between MSP and modal price on disposal in the notified market.
- PDPS will create a win-win situation for both farmers and the government. While assuring MSP for farmers, it will reduce the accumulation of unwanted foodgrains and oilseeds stocks and the fiscal costs of procurement and storage will also reduce significantly.
- Under the Private Procurement Stockist Scheme (PPSS), the government is mulling to allow the entry of private players in the procurement of oilseeds on a pilot basis.
- The private players can procure oilseeds at the state-mandated MSP for which they would be paid a service charge not exceeding 15 per cent of the notified support price.
- While some private players are already engaged in procurement of wheat, this initiative got a fresh impetus as it is expected to increase the outreach of MSP operations among all crop growers, which is essential to increase farmers’ income.
- When we have a public-private partnership in storage, there is absolutely no reason why it cannot be extended to procurement operations.
- If the ultimate objective is to deliver MSP to all farmers, how does it matter if procurement is done through FCI or ITC or Hindustan Unilever, which not only undertake exports and domestic trading of agri-commodities on their account but are also engaged in buying wheat mainly to meet their branded atta requirements?
What's the issue in the scheme?
The main crops covered under the scheme this season are moong, urad, arhar, groundnut and soya bean. The late arrival of the monsoon means that harvests and crop arrivals also began slightly later than expected, especially for arhar or tur dal, so procurement is likely to continue, though tapering, until February. However, procurement is still lagging badly in most States.
A total of 37.59 lakh metric tonnes of procurement had been sanctioned under the Centrally funded scheme. However, only 1.08 lakh tonnes have been procured so far, according to data placed in the Lok Sabha.
- The crux of the issue is that unless procurement is strengthened by various means, any hike in MSP will not proportionately benefit farmers.
- While the pace of procurement increased in recent years, the data released by NAFED for 2018-19 indicates lack of coordination of State governments with procuring agencies has resulted in poor procurement of Kharif and Rabi pulses and oilseeds in many growing States.
- Unless State governments work in harmony with the procuring agencies, all concerted efforts that are being taken towards making a robust and efficient procurement mechanism will fail to bring about a paradigm shift in farmers’ income.