A Amarender Reddy
KHARIF harvesting operations are going to start quickly. Agricultural manufacturing is more likely to surpass final yr’s report manufacturing by 7-8%. The greater manufacturing inevitably places downward strain on market costs. The downside of low harvest costs has been compounded by the steep fall within the GDP development charge within the first quarter of 2020-21; it’ll cut back total demand for the agricultural produce. Hence, making certain the Minimum Support Price (MSP) for farmers is a big process.
There are enormous imbalances within the MSP operations. Various states have numerous ranges of implementation capabilities. Punjab and Haryana are traditionally in a greater place to acquire on the MSP than states like Bihar and Odisha. Paddy farmers in Punjab are in a position to promote on the MSP, whereas farmers in Bihar should accept costs beneath the MSP. The focus is on paddy and wheat, with negligible procurement of pulses, oilseeds and different crops on the MSP.
This discriminatory coverage blocked crop diversification in the direction of pulses and oilseeds and in addition led to the neglect of rain-fed areas, the place pulses and oilseeds are grown. This resulted in an enormous scarcity of crops like oilseeds. India is importing 70% of home consumption of edible oils annually by spending about Rs 75,000 crore on international change. It is incurring enormous losses in storing extreme shares of paddy and wheat procured underneath the worth assist scheme.
Procuring extreme shares is a waste of assets. Procurement operations are flawed in some ways — ignorance amongst farmers; lack of working capital with procurement companies; lack of gunny luggage; delayed funds to farmers; insufficient logistical preparations like godowns, processing mills within the procuring areas; disposal of procured shares.
NITI Aayog not too long ago advisable to the Food Ministry to restrict procurement of foodgrains to the extent wanted for distribution underneath social welfare schemes and upkeep of buffer. The FCI procured 115 million metric tonnes (MT) of foodgrains in crop yr 2020, whereas the utmost buffer inventory is fastened at 41.12 million MT.
To overcome these issues in foodgrain operations, the Centre launched PM-AASHA (Pradhan Mantri Annadata Aay Sanrakshan Abhiyan) in 2018. This is in keeping with the broader goal of steadily changing bodily procurement with direct cash switch to farmers, wherever required. PM-AASHA has three sub-schemes: Price Support Scheme (PSS), Price Deficiency Payment Scheme (PDPS) and Private Procurement & Stockist Scheme (PPSS).
The PSS includes procurement by the federal government company on the MSP from the farmers through the harvest interval; it has been in operation for paddy and wheat for the previous 4 many years. Under PM-AASHA, PSS is now broad-based to cowl pulses, oilseeds and copra along with paddy and wheat. Under this scheme, the Centre will compensate the states for any losses in procurement operations as much as 25 per cent of manufacturing.
Under the PDPS, farmers are paid the distinction between the MSP and the modal value, with out precise procurement. It is a extra market-friendly and environment friendly methodology because it eliminates the logistic prices confronted underneath PSS. It is extra sensible to implement in crops like pulses and oilseeds with scattered and thinly distributed manufacturing, the place precise procurement is dear and never possible.
Under the PPSS, personal gamers can procure oilseeds on the MSP through the notified interval in choose markets, for which they’d be paid a service cost not exceeding 15 per cent of the MSP. However, personal participation has been restricted up to now.
States are free to decide on between the sub-schemes, relying on native circumstances. In the long term, PDPS has an edge over others. Price deficiency fee via direct cash switch can curb inefficiency and corruption in foodgrain operations and the advantages will attain farmers via the already constructed JAM (Jan Dhan-Aadhaar-Mobile) trinity.
The writer is an agricultural economist at ICAR-Central Research Institute for Dryland Agriculture, Hyderabad. Views are private
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