New umbrella scheme to ensure remunerative prices to farmers

The scheme has been designed to ensure that farmers get remunerative prices for their produce as announced in the General Budget earlier this year, a government release stated. 

The government has already hiked MSP for kharif crops on the principle of 1.5 times the cost of production — in line with the target to double farmers’ income by 2022. 

The new scheme, announced after a cabinet meeting, has three components — Price Support Scheme (PSS), Price Deficiency Payment Scheme (PDPS), and Pilot of Private Procurement and Stockist Scheme (PPPS).

PDPS has been framed on the lines of the Madhya Pradesh government’s Bhavantar Bhugtan Yojana (BBY) to protect oilseed farmers. The other existing schemes of the Department of Food and Public Distribution for the procurement of paddy, wheat and nutri-cereals/coarse grains and of the ministry of textile for cotton and jute will be continued to provide MSP to farmers for these crops.

The cabinet also decided that participation of private sector in procurement operation needs to be piloted so that based on the learnings, the ambit of private participation in procurement operations may be increased. For oilseeds, states have the option to roll out private procurement stockist scheme on a pilot basis in select districts or in Agriculture Produce Marketing Committees with the participation of private stockists. The pilot will cover one or more crop of oilseeds for which the MSP is notified. Since this is akin to PSS, in that it involves physical procurement of the notified commodity, it will substitute PSS/PDPS in the pilot districts.

The selected private agency shall procure the commodity at the MSP in the notified markets during the notified period from the registered farmers in consonance with the Private Procurement Stockist Scheme guidelines, whenever prices in the market fall below the notified MSP and whenever authorised by the state/UT government to enter the market; a maximum service charge of up to 15 per cent of the notified MSP will be payable.

The Food Corporation of India, the government’s nodal agency for procurement and distribution of foodgrains, already procures wheat and rice at MSP for supply through ration shops and welfare schemes.

The centre also implements the market intervention scheme for procurement of those commodities, which are perishable in nature and are not covered under the MSP policy. Under the MSP policy, the government fixes the rates for 23 notified crops grown in kharif and rabi seasons.