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Context:

The Union Agriculture Minister has approved the procurement of moong (green gram) and urad (black gram) in Madhya Pradesh, and urad in Uttar Pradesh, under the Price Support Scheme (PSS).

About Price Support Scheme (PSS)

It is a government intervention designed to protect farmers from the volatility of market prices. It functions as a safety net by guaranteeing the purchase of agricultural produce at a pre-determined Minimum Support Price (MSP).

The PSS is a vital component of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA), an umbrella scheme launched in 2018 to ensure that farming is a remunerative activity for farmers.

Objectives

Preventing Distress Sales => It ensures farmers receive the MSP for their produce when market prices are low.

Crop Diversification => It encourages the cultivation of pulses and oilseeds, which are crucial for the nation's nutritional security and for reducing import dependency.

Buffer Stock Creation => The scheme helps in building a strategic reserve of these commodities.

Mechanism of Operation

The scheme comes into force when the market price of a notified commodity falls below its MSP.

Procurement Process => Central nodal agencies, in collaboration with state governments, purchase the produce directly from farmers at the declared MSP. The product must meet the Fair Average Quality (FAQ) standards.

Procurement Limit => Under normal circumstances, procurement is capped at 25% of the state's total production for that specific crop. However, for the procurement year 2024-25, the government has permitted the procurement of Tur, Urad, and Masur up to 100% of the state's production to boost domestic output.

Duration => Procurement operations continue until market prices stabilize at or above the MSP.

Financial Support => The Central Government bears the expenditure and any losses incurred during procurement operations.

Implementing Agencies

The scheme is implemented through a collaborative effort between central and state-level agencies.

The primary agency is the National Agricultural Cooperative Marketing Federation of India (NAFED). It is supported by the National Cooperative Consumers' Federation of India (NCCF) and the Food Corporation of India (FCI), which steps in where NAFED's presence is limited.

About PM-AASHA

The PSS is one of three sub-schemes under the PM-AASHA umbrella, offering states flexibility in implementation. The three components are:

• Price Support Scheme (PSS): Involves physical procurement of crops at MSP by government agencies.
• Price Deficiency Payment Scheme (PDPS): This scheme does not involve physical buying.
  • Farmers are paid the difference between the MSP and the market price directly into their bank accounts. It is primarily intended for all notified oilseeds.
• Pilot of Private Procurement & Stockist Scheme (PPSS): This component allows the participation of private sector players in the procurement process on a pilot basis.
• • It is an option for states for the procurement of oilseeds in selected districts.

A state can choose only one of the three schemes for a single commodity to avoid operational overlap.

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PRICE SUPPORT SCHEME 

Source: 

LIVEMINT