Cabinet approves the continuation of the Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA)
Kartavya Desk Staff
Syllabus: Agriculture
- •Source: PM India*
Context: The Union Cabinet has approved the continuation of the Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA) schemes to ensure farmers get fair prices and stabilize consumer prices of essential goods.
The initiative, with a financial outlay of Rs. 35,000 crore until 2025-26, integrates schemes like the Price Support Scheme (PSS) and Price Stabilization Fund (PSF). It includes 100% procurement of certain crops, increased state procurement limits, and support for pulses, oilseeds, and perishable crops, aiming to reduce imports and protect consumers from price volatility.
About PM AASHA:
Scheme Component | Description
Objective | Ensure remunerative prices for farmers through Minimum Support Price (MSP) assurance. Announced in 2018 budget.
Aim | Strengthen the procurement mechanism to improve farmers’ income.
Components | 1. Price Support Scheme (PSS) 2. Price Deficiency Payment Scheme (PDPS) 3. Private Procurement & Stockist Scheme (PPPS)
Price Support Scheme (PSS) | Central nodal agencies (NAFED, FCI) will procure pulses, oilseeds, and copra. 25% of marketable surplus will be procured. Government covers procurement costs and losses.
Price Deficiency Payment Scheme (PDPS) | State pays the difference between mandi prices and MSP for oilseeds. No physical procurement involved. Modeled on schemes from Madhya Pradesh and Haryana.
Private Procurement & Stockist Scheme (PPPS) | Piloted in select districts. Private agencies procure oilseeds at MSP in coordination with the government when prices fall below MSP.
Issues with the Scheme:
• Limited procurement infrastructure benefits mainly wheat and rice.
• Only 6% of farmers sell produce at MSP (NSSO, 2013).
• Low MSP awareness: 24% of households aware of MSP for their crops (2017 study).
• MSP operations focus on a few states, leaving most crops under-procured.
• 79% of farmers dissatisfied with MSP due to payment delays, lack of infrastructure, long distances to centres, and delayed MSP announcements (NITI Aayog, 2016).
What is MSP?
The Minimum Support Price (MSP) is a minimum price for any crop at which the government purchases it from farmers, and is based on a calculation of at least one-and-a-half times the cost of production incurred by the farmers.
MSP does not have any legal basis but has been implemented since the 1960s with the following objectives:
• Ensuring food security in the country.
• Protection from price drop for farmers
• Incentivise desirable crop production
Importance of MSP:
• Safeguard against Price volatility: The system of MSP acts as a tool for the government to control sharp falls and rises in the prices of any crops
• Surety of minimum prices: The MSP is announced before the sowing season so that farmers can make an informed decision. Hence, supporting farmers from distress sales.
• Control crops short in supply: by offering more price support for these crops so that more and more farmers are tempted to grow these crops.
• Crop Diversification: MSP for crops promotes their diversification and curbs import-dependence and food inflation (e.g., there was a notable increase in the MSP of pulses and oilseeds in 2021 in order to incentivise its domestic production)
• Food security: The government can use these crops to be sold at government fair price shops at a price lower than the market rate to the below poverty line people at a lower price. Developmental schemes like PM-POSHAN, ICDS, Anganwadi Services Scheme, and TPDS rely on grains procured by FCI at MSP.
• Developmental schemes like PM-POSHAN, ICDS, Anganwadi Services Scheme, and TPDS rely on grains procured by FCI at MSP.
Mains Links:
What do you mean by Minimum Support Price (MSP)? How will MSP rescue the farmers from the low-income trap? (UPSC 2019)
Prelims Links:
Consider the following statements: (UPSC 2020)
• In the case of all cereals, pulses and oil seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India.
• In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
Ans: D