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
Giving a major boost to the pro-farmer initiatives of the Government and in keeping with its commitment and dedication for the Annadata, the Union Cabinet has approved a new Umbrella Scheme “Pradhan Mantri Annadata Aay Sanrakshan Abhiyan’ (PM-AASHA).
Why such Scheme?
- Increasing MSP is not adequate and it is more important that farmers should get full benefit of the announced MSP.
- For this, government realizes that it is essential that if price of the agriculture produce market is less than MSP, then govt. should purchase either at MSP or work in a manner to provide MSP for the farmers through some other mechanism.
- The Scheme is aimed at ensuring remunerative prices to the farmers for their produce as announced in the Union Budget for 2018.
- Government has already increased the MSP of kharif crops by following the principle of 1.5 times the cost of production.
- It is expected that the increase in MSP will be translated to farmer’s income by way of robust procurement mechanism in coordination with the State Governments.
- The new Umbrella Scheme includes the mechanism of ensuring remunerative prices to the farmers and is comprised of-
- Price Support Scheme (PSS),
- Price Deficiency Payment Scheme (PDPS)
- Pilot of Private Procurement & Stockist Scheme (PPPS).
- 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.
Pilot of Private Procurement & Stockist Scheme (PPPS)
- Cabinet has decided that for oilseeds, states have the option to roll out Private Procurement Stockist Scheme (PPSS) on pilot basis in selected district/APMC(s) of district involving the participation of private stockiest.
- The pilots district/selected APMC(s) of district will cover one or more crop of oilseeds for which MSP is notified.
- Since this is akin to PSS, in that in involves physical procurement of the notified commodity, it 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 consonance with the PPSS Guidelines.
- But whenever the prices in the market fall below the notified MSP maximum service charges up to 15% of the notified MSP will be payable.
Price Support Scheme (PSS)
- In Price Support Scheme (PSS), physical procurement of pulses, oilseeds and Copra will be done by Central Nodal Agencies with proactive role of State governments.
- It is also decided that in addition to NAFED, Food Cooperation of India (FCI) will take up PSS operations in states /districts.
- The procurement expenditure and losses due to procurement will be borne by Central Government as per norms.
Price Deficiency Payment Scheme (PDPS)
- Under PDPS it is proposed to cover all oilseeds for which 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 payment will be done directly into 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/modal price on disposal in notified market.