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The Pradhan Mantri’s ‘AASHA’
Dr. Parveen Kumar, Dr. R. K. Arora, Dr. Pawan Kumar9/17/2018 10:18:26 PM
Providing remunerative prices to the farmers is very important for increasing agricultural production and productivity. A remunerative price is also necessary to provide the much needed motivation to the farming community particularly to the youths not to shy away from this noble profession. The government announces, Minimum Support Prices (MSP) for 25 major agricultural commodities each year in both the crop seasons. The rates are announced based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). The CACP recommends MSP for twenty two crops and Fair and Remunerative Price (FRP) for sugarcane. Apart from Sugarcane for which FRP is declared by the Department of Food &Public Distribution, twenty two crops covered under Minimum Support Price are Paddy, Jowar, Bajra, Maize, Ragi, Arhar, Moong, Urad, Groundnut-in-shell, Soya bean, Sunflower, Sesame, Niger seed, Cotton, Wheat, Barley, Gram, Masur (lentil), Rapeseed/Mustard seed, Safflower, Jute and Copra. In addition, MSP for Toria and De-Husked coconut is fixed by the Department on the basis of MSP's of Rapeseed/Mustard seed and Copra respectively. Besides, announcing the Minimum Support Price for different crops, the Government also organizes procurement operations of these agricultural commodities through various public and cooperative agencies such as Food Corporation of India (FCI), Cotton Corporation of India (CCI), Jute Corporation of India (JCI), Central Warehousing Corporation (CWC), National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED), National Consumer Cooperative Federation of India Ltd. (NCCF), and Small Farmers Agro Consortium (SFAC). But what happens usually is that the market price for agricultural produce of most of the crops many times tends to be higher than the MSP and FRP resulting in undue losses to the growers. This ultimately demotivates and acts as a disincentive for the farmer to produce more besides discourage adoption of the modern technology and required inputs without the desired returns. The current MSP regime has also not been so effective in terms of its limited reach both for the crops as well as the geographical area it covers. Though every year MSPs are announced for 20-plus crops before the sowing season begins, actual procurement at MSP is restricted to a few crops such as paddy and wheat. This leads farmers to extensively focus on the crops with assured procurement and those having an effective MSP. That is the reason perhaps why country has not been self sufficient in pulses and oilseeds and other coarse cereals. Another disadvantage with this is that the crops with effective MSPs such as rice, wheat and sugarcane, where support prices are effective now, are also water-intensive. This type of monoculture also results in water loss, soil degradation making crops susceptible to pest and weed, leading to higher usage of chemical fertilizers and pesticides.
In an effort to undo the loopholes with the present price support system and to give another boost to the farming sector, the National Democratic Alliance government led by PM Sh. Narendra Modi has launched the Pradhan Mantri 'Annadata Aay Sanrakshan Abhiyaan' (PM-AASHA). The present dispensation has already announced to increase the MSP of kharif crops to one and a half times their cost of cultivation. Keeping the words, the Pradhan Mantri's AASHA will ensure that the farming community gets the hiked MSP from the Kharif 2018. For this the government has also earmarked rupees 15,053 crore for the next two financial years. Agriculture Minister, Government of India Sh. Radha Mohan Singh called it as a historic decision aimed at ensuring remunerative prices to the farming community as announced in the union budget 2018-19. The PM-AASHA gives the states flexibility in choosing among the three farm compensation plans besides roping in private agencies for procurement to ensure profitable price for farmers. Under the PM-AASHA, the states will be allowed to choose from three schemes-Price Support Scheme, Price Deficiency Payment scheme and Pilot of Private Procurement Stockist Scheme to undertake procurement of food grains when price fall below Minimum Support Price (MSP). Of the rupees 15,053 crores sanctioned in the next two financial years, rupees 6,250 crore will be spent this year. Also the credit line for procurement agencies has been enhanced by providing additional government guarantee of 16,650 crore taking the total to rupees 45,550 crore. The concept of Price Deficiency Payment (PDP) scheme was mooted out by National Institution for Transforming India (NITI) Aayog. Under Price Deficiency Payment, farmers are proposed to be compensated for the difference between the government-announced MSPs for select crops and their actual market prices. For those crops such as rice and wheat for which the MSP is effective now, the MSP announcements will continue. For other targeted crops, price deficiency payments will be made. The NITI Aayog has said that the farmer may be entitled to the difference up to say, 10 per cent. To avail this benefit, each farmer would have to register with the nearest APMC mandi and report the total area sown. The subsidy may be paid via Direct Benefit Transfer (DBT) into the farmer's Aadhaar-linked bank account. Besides the PM-AASHA, the government also in order to incentivize sugar industry has also announced that millers who produce bio fuel from sugar cane juice would get the support price of rupees 59.19 which is rupees 12.06 higher than the current rate,
Under such a scenario where the MSPs haven't been a great support to either farmers or consumers the new system of payment to farmers can prove to be more effective in providing a more remunerative price of their produce.
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