Cabinet clears new procurement policy

• The Centre has announced a Rs. 15,053 crore scheme to ensure that farmers growing oilseeds, pulses and copra actually get the minimum support prices (MSP) they are promised for their crops every year.

• The umbrella policy — Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA)

• It was approved by the Cabinet Committee on Economic Affairs on Wednesday.

• It clubs together an existing procurement scheme with newly introduced options meant for oilseeds only.

• The need of additional procurement by private traders or a cash payment scheme.

Credit guarantee

• Apart from the Rs. 15,053 crore to be spent over a two-year period to implement the scheme, the Cabinet approved an additional government credit guarantee of Rs. 16,550 crore for agencies undertaking procurement.

• The government is working with a holistic approach.

• Increasing MSP is not adequate and it is more important that farmers get the full benefit of the announced MSP,” said the statement.

MSP hiked by 50%

• The government announces minimum support prices for 23 crops every year.

• This year, these rates were set at 50% higher than the farmers’ production costs, including labour cost.

• The rates are meant to give remunerative prices to the farmers.

• About one-third of the harvest of the two major foodgrains, rice and wheat, are procured by the Centre at the MSP for sale in ration shops.

• However, most of the 21 other crops are sold at market prices, often below the MSP, as the government’s procurement operations are temporary.

Way forward

• Over the last two years, the government has increased the procurement of pulses and oilseeds at MSP under the Price Support Scheme.

• In 2017-18, the National Agricultural Cooperative Marketing Federation of India said it bought 31.9 lakh tonnes of pulses and oilseeds at the MSP,

• It benefiting 20 lakh farmers. But the total production of pulses was estimated at 240 lakh tonnes, while oilseed production was 300 lakh tones.


Mains Paper 3: Agriculture | Transport and marketing of agricultural produce and issues and related constraints;

Prelims level:  Pradhan Mantri Annadata Aay Sanrakshan Abhiyan

Mains level: How new procurement policy improve Indian agriculture sector?