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The Government of India has established an umbrella scheme “Pradhan Mantri Annadata Aay Sanrakshan Abhiyan” (PM-AASHA) for farmers. PM-AASHA scheme is aimed at ensuring the remunerative prices to farmers for their produce as announced in the Union Budget. This scheme follows increasing farmer unrest across the country as prices of many key agricultural commodities have fallen below their Minimum Support Price (MSP). Three different components of this scheme are covering the gaps in the procurement and compensation mechanism for crops and help boost farmers’ income.

Components of PM-AASHA scheme

The PM-AASHA scheme has three components and state can choose out of them.

  • The Price Support Scheme (PSS)
  • The Pilot of Private Procurement and Stockist Schemes (PPPS)
  • The Price Deficiency Payment Scheme (PDPS)

These three components are complementing the existing schemes of the Department of Food and Public Distribution. Schemes related to wheat, paddy and other cereals and coarse grains where procurement is at MSP now.

Minimum Support Price (MSP)

Minimum Support Price is a price at which state Government purchases the crops from the farmers; it is the price for the crops.

Importance of PM-AASHA Scheme

The reach of the current minimum support price procurement system is very poor both in terms of geography and the crops covered. The Centre notified a hike in MSPs for several Kharif crops; it will pay farmers the cost of production as decided by CACP plus a 50%  profit while procuring. However, this works well only for wheat, paddy and select cash crops where there is direct procurement by the industry. In the physical procurement, government agencies end up stockpiling food grains; this results in incurring storage cost and significant wastage and leakage as well. So the AASHA scheme results in savings for the Centre.

The government-driven procurement is almost nil in many crops such as oilseeds, thereby defeating the purpose of MSP. Besides, due to various factors, there is increasing farmer unrest across our nation. Prices of main agricultural commodities have fallen below their minimum support price. The PM – AASHA scheme thus tries to address the gaps in the MSP system and give better returns. The scheme also promises to plug the holes in the procurement system.

Benefits of PM – AASHA Scheme

The benefits of PM – AASHA scheme is listed as follows:

  • PM – AASHA scheme points to an innovative, MSP-plus approach to the problem of no remunerative prices
  • The three different components would cover the gaps in the procurement and compensation mechanism for crops.
  • PM – AASHA scheme will also help revive the rural economy by assuring better income to farmers.
  • With better prices across crops, this scheme may ensure crop diversification and reduce the stress on soil and water.
  • With the introduction of PM-AASHA, there is no need for going through the hassle of physical procurement, storage and disposal

Price Support Scheme (PSS)

As per Price Support Scheme, the physical procurement of pulses, oilseeds and copra is done by central modal agencies with the proactive role of state governments. The National Agricultural Cooperative Marketing Federation of India Limited (NAFED) and Food Cooperation of India (FCI) also taking the PSS operations in states and districts. The Union Government will bear the procurement expenditure and losses due to procurement as per norms.

Price Deficiency Payment Scheme (PDPS)

This scheme covers 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 markets yard through a transparent auction process. All payments under this scheme will be done directly into the registered bank account of farmers. It will involve the physical procurement of crops as farmers are paid the difference between the MSP rate and sale or modal price on disposal in a notified markets. Central Government’s support for PDPS will be given as per norms.

Pilot of Private Procurement & Stockiest Scheme (PPPS)

PPPS scheme will allow the participation of private sectors in the procurement operation needs on a pilot basis. Learnings from these outcomes will help to increase ambit of private participation in the procurement operations. Initially, it was applicable for procurement of oilseeds. States have the option to roll out PPPS 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 substitutes PSS/PDPS in pilot districts as it is similar to the PSS scheme and involves physical procurement of notified commodity. The selected private agency will procure commodity at MSP in notified markets during the notified period from registered farmers in accordance with PPSS Guidelines, whenever prices in market fall below notified MSP and whenever authorised by state & UT government to enter the market. The maximum service charges up to 15% of the notified MSP will be payable.

Pro-farmer initiatives of the Government

The Government of India is committed to realising the vision of doubling farmers’ income by 2022.  The emphasis is on enhancing productivity, reducing the cost of cultivation and strengthening the post-harvesting management, including the market structure.  Several market reforms have been initiated, including Model Agricultural Produce and Livestock Marketing Act, 2017 and Model Contract Farming and Services Act, 2018.  Many Indian states have taken steps to adopt these through legislation.

Efforts are on for new market architecture, to ensure that farmers get remunerative prices on their produce. These include following:

  • Setting up of a Gramin Agricultural Markets (GrAMs) to promote 22,000 numbers of the retail market in close proximity of farm gate
  • Competitive and transparent wholesale trade at APMC via e-NAM and a robust and pro-farmer export policy
  • Pro-farmers’ initiatives such as the implementation of Pradhan Mantri Fasal Bima Yojana (PMFBY), Pradhan Mantri Krishi Sinchai Yojana (PMKSY), Paramparagat Krishi Vikas Yojana (PKVY) and distribution of Soil Health Cards have been undertaken.