19th January, 2020

Government Plans Scheme To Assure Support Prices For Crops

Farmers’ distress is emerging as a threat to economic and political stability. The recent voter outrage against the BJP in rural Gujarat is a strong hint that government needs more efforts for the farming sector.

The reports say that agriculture will assume the topmost priority in Union Budget 2018. Also reported is that the Central government is planning to launch a new price support scheme for farmers in consultation with states. This would prevent distress farm sales at rates below the minimum support price (MSP).

Market Assurance scheme

The states will be free to procure all crops from farmers for which the MSPs are announced under the ‘market assurance scheme’. The rice and wheat are excluded from this scheme. The Centre will reimburse up to 30% of the procurement cost on any losses incurred by states.

The scheme would ensure assured prices for the producer, and avert price risks faced by farmers upon harvest.

States will float the scheme regionally, and will have to decide which crop to procure and in what quantities. State governments may also use procured crops for dedicated (or chosen)nutrition-support programmes. It may even sell the crop in the open market.

The scheme is deliberated on issues of employment and agriculture. It has a special focus on framing a policy on farm income. 

The NITI Aayog has made several presentations on how to enhance agri-productivity. The Union rural minister made special presentations on Antyodaya mission for poverty-free panchayats.

Why Market Assurance Scheme 

The proposed scheme comes in the wake of the record harvest of pulses and cereals in 2016-17. The bumper harvest drove the wholesale prices to levels below MSPs.

The price crash led farmer protests across the country since June. They demanded for remunerative crop prices and loan waivers.

Madhya Pradesh launched its own price support schemes (Bhavantar Yojana) for farmers growing pulses and oilseeds.