Minimum Support Prices for Agricultural Produce

[pib] Price Support Scheme (PSS)


From UPSC perspective, the following things are important :

Prelims level: Price Support Scheme (PSS)

Mains level: Read the attached story

Central Idea

  • Procurement Ceilings for Pulses: The government has removed the procurement ceilings of 40% for tur, urad, and masur under the Price Support Scheme (PSS) operations for 2023-24.

What is Price Support Scheme (PSS)?

  • Physical procurement: The Price Support Scheme (PSS) involves the physical procurement of pulses, oilseeds, and copra by Central Nodal Agencies.
  • Nodal Agencies: The National Agricultural Cooperative Marketing Federation of India (NAFED) and the Food Corporation of India (FCI) are the designated agencies responsible for procuring crops under the PSS.
  • Implementation: The scheme is implemented in collaboration with state governments, who exempt the procured commodities from mandi tax and provide logistical support, including gunny bags and working capital.

Need for such scheme

  • Balancing farmer and consumer interests: The PSS strikes a balance between the welfare of farmers and consumers, ensuring fair returns for farmers and affordable prices for consumers.
  • Remunerative prices: The primary objectives of the PSS are to provide remunerative prices to farmers, encouraging increased investment and production, while ensuring affordable prices and availability for consumers.
  • Encouraging production: By offering a guaranteed price, the PSS incentivizes farmers to invest in agricultural production, leading to increased output and self-sufficiency.
  • Consumer welfare: The scheme aims to protect the interests of consumers by ensuring a stable supply of essential commodities at reasonable prices, reducing intermediation costs.
  • Market intervention: The PSS acts as a market intervention measure, stabilizing prices, and mitigating the risks faced by farmers due to market fluctuations and unforeseen circumstances.
  • Support for agricultural growth: The scheme is part of the government’s broader efforts to support agricultural growth, enhance farmer income, and promote food security in the country.

Why in news?

  • Notified Essential commodities: On June 2, 2023, the government imposed stock limits on tur and urad by invoking the Essential Commodities Act, 1955.
  • Prevent hoarding: The imposition aims to prevent hoarding and unscrupulous speculation, as well as improve affordability for consumers.
  • Applicability and declaration: Stock limits are applicable to wholesalers, retailers, big chain retailers, millers, and importers, who are required to declare their stock position on the portal of the Department of Consumer Affairs.

Enforcement of Stock Limits by State Governments:

  • Directives to state governments: The Department of Consumer Affairs has directed state governments to ensure strict enforcement of the stock limits in their respective states.
  • Monitoring and verification: States have been asked to monitor prices and verify the stock position by coordinating with various warehouse operators.
  • Cooperation from warehousing corporations: Central Warehousing Corporation (CWC) and State Warehousing Corporations (SWCs) have been requested to provide details of tur and urad stocks held in their warehouses.

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