The Government has approved a new umbrella scheme, “Pradhan Mantri Annadata Aay Sanrakshan Abhiyan” (PM-AASHA), aimed at ensuring remunerative prices for farmers’ produce, as announced in the Union Budget for 2018.
Components of PM-AASHA
There are three primary components of PM-AASHA: the Price Support Scheme (PSS), the Price Deficiency Payment Scheme (PDPS), and the Pilot of Private Procurement & Stockist Scheme (PPPS).
Price Support Scheme (PSS)
Under PSS, central nodal agencies will procure pulses, oilseeds, and copra with proactive involvement from the state governments. The Food Corporation of India (FCI) and the National Agricultural Cooperative Marketing Federation of India (NAFED) will implement this scheme. Procurement expenditure and losses will be covered by the Central Government according to set norms. This plan aims to procure approximately 25% of farmers’ marketable surplus for eligible crops, with around Rs. 16,000 crores allocated as bank guarantee for agencies to procure from farmers.
Price Deficiency Payment Scheme (PDPS)
Within PDPS, the state will bridge the gap between mandi prices and the MSP for all oil-seeds, following a model similar to the Bhawantar Bhugtan Yojana in Madhya Pradesh and the Bhavantar Bharpai Yojana in Haryana. This scheme involves no physical procurement of crops.
Pilot of Private Procurement & Stockist Scheme (PPPS)
Rather than PSS and PDPS, PPPS will be implemented in select districts. Private agencies will procure oilseeds in accordance with government guidelines and regulations, particularly when market prices fall below the MSP.
Issues with PM-AASHA
Despite its good intentions, PM-AASHA has drawn criticism for not sufficiently strengthening the procurement mechanism infrastructure. Currently, this mechanism operates largely for only two crops: wheat and rice. Surveys suggest that only 6% of farmers are able to sell their produce at MSP, and many farmers are dissatisfied or unaware of the MSP regime due to late payments, insufficient infrastructure, distance to procurement centres, and delayed MSP rate announcements.
Other Initiatives for Farmer Welfare
The Government is also adopting several measures to boost farmers’ incomes by 2022. This includes enhancing productivity, reducing cultivation costs, strengthening post-harvest management, creating a new market architecture, and setting up Gramin Agricultural Markets (GrAMs) near farm gates. Additional initiatives include launching the Pradhan Mantri Fasal Bima Yojana, Pradhan Mantri Krishi Sinchai Yojana, Paramparagat Krishi Vikas Yojana, and distribution of Soil Health Cards.
Role of Food Corporation of India (FCI)
Established under the Food Corporation’s Act of 1964, FCI aims to safeguard the interests of farmers, distribute food grains throughout the country for public distribution system, and maintain a satisfactory level of operational and buffer stocks of food grains.
National Agricultural Cooperative Marketing Federation of India Ltd (NAFED)
NAFED was established in 1958 to promote cooperative marketing of agricultural produce to benefit farmers. Agricultural farmers are the key members of NAFED and hold significant authority through their membership in the General Body.