Minimum Support Prices for Agricultural Produce

Govt. procurement scheme fails to ensure MSP for farmersPriority 1


Mains Paper 3: Agriculture | Issues related to direct & indirect farm subsidies & minimum support prices

From UPSC perspective, the following things are important:

Prelims level: PM – AASHA and its components

Mains level: Various support schemes for farmers and their effectiveness


New scheme couldn’t make it

  1. The PM-AASHA procurement scheme, announced with great fanfare last month as a means to ensure that farmers actually receive minimum support prices for their crops.
  2. However it will not make any difference to farmers in the current season.
  3. In the mandis, cereals, pulses and oilseeds are now selling well below MSP, in some cases barely above production costs.

Present market prices

  1. Using data from the government’s Agmarknet website tracking prices at all major mandis across the country, it was found that prices for moong, tur and urad dal were barely above the cost of production as calculated by paid out costs and the imputed cost of family labour.
  2. All major protected commodies, including those three pulses, oilseeds such as groundnut and soyabean, and cereals such as bajra, jowar and maize are currently selling below MSP.

PM-AASHA couldn’t deliver this season

  1. The Cabinet cleared the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) or PM’s Farmers Income Protection Drive in September.
  2. The umbrella policy clubbed together an existing government procurement scheme with newly introduced options — meant for oilseeds only — of additional procurement by private traders or a cash payment scheme.
  3. Six weeks later, senior Agriculture Ministry officials admit that the scheme will make no difference to the plight of farmers on the ground this season, and will not improve their chances of getting MSP for their crops.

Lack of infrastructure

  1. Only Madhya Pradesh has opted for the cash payment component as it already had been implementing a cash payment using State funds.
  2. The only difference is they can now use Central funds up to 25%, but that will not change anything for the farmer.
  3. No other state has readied the IT infrastructure needed to implement it.

Supplement this newscard with:

[pib] Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA)

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