The agricultural industry in India, which sustains around 60 per cent of the population, has always encountered difficulties concerning fair pricing, erratic weather conditions, and varying market needs.
Acknowledging the importance of farmers in India’s economy, the Modi government introduced the PM-AASHA scheme in 2018 to guarantee that farmers are paid a fair amount for their crops, mainly by offering a Minimum Support Price (MSP) and inclusive purchasing tactics.
On September 18, the Union government approved the continuation of the PM-AASHA scheme, with an outlay of Rs 35,000 crore “to provide remunerative prices to farmers and to control price volatility of essential commodities for consumers”.
As the scheme completes six years on September 25, it becomes important to understand how it is helping Indian farmers and leading to higher production rates for a variety of crops, especially oilseeds and pulses.
Understanding PM-AASHA
PM-AASHA is primarily a government-supported programme designed to safeguard farmers’ earnings by utilising three main strategies:
1. Price Support Scheme (PSS): In this programme, the government purchases pulses, oilseeds, and copra at Minimum Support Price (MSP) from farmers.
2. Price Deficiency Payment Scheme (PDPS): This provides compensation to farmers when market prices drop below MSP by covering the price difference.
3. Pilot Private Procurement and Stockist Scheme (PPPS): Implemented in specific districts, this initiative promotes private firms to purchase oilseeds from farmers at Minimum Support Price, alleviating the burden on government procurement. Importantly, in the cabinet meeting on September 18, the NDA government decided to discontinue this sub-scheme under PM AASHA, effectively ending private sector involvement in the procurement of crops at minimum support prices.
Instead, the Centre converged the Price Support Scheme (PSS) and Price Stabilisation Fund (PSF) schemes to make PM-AASHA more effective in providing remunerative prices to farmers for their produce but also control the price volatility of essential commodities by ensuring their availability at affordable prices to consumers.
The Importance of PM-AASHA for Indian Farmers
Farmers in India have been struggling for many years with the instability of the market and the uncertainty of crop prices. Frequently, abundant harvests lead to an excess supply that lowers prices, causing farmers to be in debt. PM-AASHA seeks to tackle this issue by providing assured minimum pricing under MSP. The programme serves as a financial buffer for farmers by minimising price fluctuations, allowing them to prepare for the future and upgrade their agricultural resources.
Furthermore, the programme’s emphasis on purchasing pulses and oilseeds, which are typically cultivated by small-scale farmers, has increased the prominence of these crops. This change has advanced crop diversification, leading to improved soil health and decreased likelihood of crop failure.
Data Talks: PM-AASHA’s Influence Over Six Years
After PM-AASHA was introduced, there has been a noticeable rise in production and MSP payouts. Here are a few interesting data points:
The production of pulses has risen from 163.23 lakh tonnes under the UPA government in 2013-14 to over 275 lakh tonnes in 2022-23, with farmers more confidently investing in pulses due to the support provided by PM-AASHA since 2018.
Under PM AASHA, procurement is undertaken directly from pre-registered farmers conforming to the prescribed Fair Average Quality (FAQ) norms by central nodal agencies through state-level agencies at MSP announced by the Centre as and when prices fall below MSP during the harvesting period. During the year 2021-22, a total of 30.31 lakh tonnes of pulses were procured under PSS benefitting 13.9 lakh farmers, while during 2022-23, approximately 28.33 lakh tonnes of pulses were procured, benefitting over 12.5 lakh farmers.
When it comes to oilseeds, India produced just about 32.4 million tonnes in 2013-14. By 2022-23, that figure had skyrocketed to a whopping 413.55 lakh tonnes. Essentially, that means India has seen its oilseed production rising by an astonishing 1176.4 per cent between 2014 and 2023.
From 2014 to 2023, the minimum support price for different crops has experienced an average rise of 45-50 per cent, providing advantages to numerous farmers nationwide. An example is the price of wheat, which in 2013-14 was Rs 1,400 per quintal. In 2023, the price had increased to Rs 2,125 per quintal.
Comparison With the UPA Era
There is a noticeable contrast in the quantity of procurement and the level of MSP increases between the UPA (2004-2014) and Modi government (2014-present) when examining MSP procurement patterns.
In the last 10 years, farmers have received nearly Rs 18 lakh crore as MSP for paddy and wheat crops. This is 2.5 times more than the preceding 10 years before 2014. Previously, the government procurement of oilseeds and pulses crops was negligible. Since 2018-19, the government has ensured a minimum of 50 per cent margin over the all-India weighted average cost of production for each crop covered under MSP. This price support also aims to reduce India’s import dependence and foster diversification towards pulses, oil, and commercial crops. In the last decade, farmers producing oilseeds and pulses have received over Rs 1.25 lakh crore as MSP.
The Modi administration has increased its focus on procuring pulses and oilseeds, in contrast to the UPA era. Accordingly, the highest increase in MSP was approved for lentil (masur) at Rs 425 per quintal, followed by rapeseed and mustard at Rs 200 per quintal in 2023-24. This change in strategy has brought a great sense of relief to farmers cultivating these crops, especially in areas reliant on rain for irrigation.
PM-AASHA has become a key pillar in supporting Indian farmers, ensuring fair pricing and providing a buffer against market volatility. By focusing on Minimum Support Price (MSP) and diversifying crop procurement, the scheme has boosted the production of pulses and oilseeds, ensuring better financial security for small farmers.
Comments
0 comment