Government Approves Continuation, Enhancement Of Schemes For Crop Procurement, MSP

The Union Cabinet approved on Wednesday the continuation of schemes of Pradhan Mantri Annadata Aay Sanrakshan Abhiyan to provide remunerative prices to farmers and control price volatility of essential commodities for consumers. The total financial expenditure is expected to reach Rs. 35,000 crore during the 15th Finance Commission cycle upto 2025–26.

The Price Support Scheme and the Price Stabilization Fund have been converged in PM Aasha to serve the farmers and consumers more effectively. The integrated scheme will bring in more effectiveness in the implementation in a bid to provide remunerative prices and also control the price volatility by making sure that they are available at affordable prices to consumers, according to an official release.

PM-Aasha will now have the components of PSS, PSF, Price Deficit Payment Scheme and the Market Intervention Scheme. Starting from the 2024–25 season, the procurement of notified pulses, oilseeds, and copra at minimum support price will be based on 25% of the national production of these crops.

It will enable states to procure more of these crops at MSP from farmers to ensure remunerative pricing and prevent distress sale. This price ceiling will not be applicable in case of tur, urad and masoor for 2024–25 as there will be a 100% procurement of tur, urad and masoor during the season.

The government has renewed and enhanced the existing government guarantee to Rs 45,000 crore for the procurement of notified pulses, oilseeds and copra at the MSP from farmers. The move will motivate farmers to cultivate more of these crops in the country and to achieve self-sufficiency when it comes to meeting the domestic requirement for these crops and reduce dependence on imports.

The extension of the PSF has been done with the aim of protecting consumers from extreme price volatility of agri-horticultural commodities by keeping a strategic reserve of pulses and onions for controlled distribution. This was done to discourage "hoarding, unscrupulous speculation; and for supplies to consumers at affordable prices".

Interventions under the PSF scheme have also been implemented for other crops like tomatoes, as well as in the subsidised retail sale of Bharat Dal, Bharat Atta, and Bharat Rice.

In order to encourage the states to come forward for implementation of PDPS as an option for notified oilseeds, the coverage has been increased from the existing 25% of state production of oilseeds to 40%. The implementation period has also increased from three months to four months. "The compensation difference between the MSP and Sale/Modal price to be borne by the central government is limited to 15% of the MSP."

The extension of MIS implementarion with changes is also meant to provide remunerative pricing to farmers growing perishable horticulture crops. The coverage has been increased from 20% to 25% of production and has added a new option of making differential payment directly into the farmers' account instead of physical procurement under MIS.

In case of tomato, onion and potato, the government decided to bear the transportation and storage expenses for the operations undertaken by central nodal agencies to bridge the price gap in TOP crops between producing states and consuming states during peak harvesting time. It will not only ensure remunerative prices to farmers but also soften the prices of TOP crops for consumers in the market.