New procurement policy to ensure MSP to farmers

As prices of farm produces started tumbling even before the Kharif crops hit the market, the government on Wednesday announced an innovative scheme involving private traders in procurement of the oilseeds as a pilot scheme to ensure farmers get the assured minimum support price (MSP).

The government announced a Rs 15,053-crore procurement policy allowing states to choose a compensation scheme and rope in private agencies for procurement to ensure remunerative prices to farmers. The new umbrella policy 'Pradhan Mantri Annadata Aay SanraksHan Abhiyan' (PM-AASHA) was approved in the Cabinet meeting, headed by Prime Minister Narendra Modi. The PM-AASHA scheme will cost the exchequer Rs 15,054 crore in addition to another Rs 45,550 crore for subsidising the government agencies buying the farm produces wherever the prices fall below the MSP.

"The PM-AASHA is aimed at ensuring remunerative prices to the farmers for their produce as announced in the Union Budget for 2018. This is a historic decision," Agriculture Minister Radha Mohan Singh told reporters after the Cabinet meeting. Under the PMAASHA, states would be allowed to choose from three schemes -- existing Price Support Scheme (PSS), newly designed Price Deficiency Payment Scheme (PDPS) and Pilot of Private Procurement Stockist Scheme (PPSS)-to undertake procurement when prices of commodities fall below the MSP level, he said. The Cabinet has sanctioned Rs 15,053 crore to implement the PMAASHA in the next two financial years, of which Rs 6,250 crore will be spent this year. That apart, the credit line for procurement agencies has been enhanced by providing additional government guarantee of Rs 16,550 crore, taking the total to Rs 45,550 crore.