All you need to know about the Modi government’s new pro-farmer scheme

By Prarthana Mitra

The central government on Wednesday announced a new umbrella policy aimed at improving farmers’ welfare in the country which has recently seen massive agrarian uprisings and increasing farmer suicides.

To placate and protect the agricultural sector against low MSP and bad yield, the Union Cabinet led by Prime Minister Narendra Modi announced remunerative prices for farmers, to compensate oilseeds farmers if rates fall below the minimum support price, and allow private companies to procure the produce.

What does the new policy involve

The new policy ‘Annadata Maulya Samrakshana Yojana’ will enable state governments to choose from multiple schemes such as Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA), to safeguard farmers when prices fall below the MSP.

PM-AASHA involves three sub-schemes, namely Price Support Scheme (PSS), Price Deficiency Payment Scheme (PDPS) and Pilot of Private Procurement & Stockist Scheme (PPPS).

Under PSS, the state government and various Central Nodal agenices will bear the expenses (and losses) of procuring 25% of pulses, oilseeds, and copra produced. Under PDP scheme, also known as Bhavantar Bhugtan Yojana, oilseed farmers will be owed the difference between the MSP and monthly average price of oilseeds quoted in the wholesale market.

The centre is especially keen to see the private sector participate in procurement operation, via the PPP scheme which will give states the option in selected districts with oilseed farms, for private stockists.

Addressing the media in Delhi, Agriculture Minister Radha Mohan Singh said that the Cabinet will also apportion an additional government guarantee of Rs 16,550 crore for procurement, ratcheting the total up to Rs 45,550 crore. “This will ensure remunerative prices to the farmers for their crops as announced in 2018 Union Budget,” the Minister was reported to have said.

Why it matters

Other schemes offered by Food and Textile ministries would also continue to provide the MSP to farmers for their respective crops. Besides, the centre also announced a hike in ethanol price by 25% to help sugar mills divert their production to the manufacturing of ethanol from sugar. Recently, the price of sugar sank due to over-production causing huge losses to the producers. A target of 10 percent ethanol blending in petrol was set up as target by the government by 2022.

The budgetary provisions for procurement operations have been increased to Rs 15,053 crore, for the implementation of the scheme. This announcement arrives in the nick of time, right after two major farmers’ protests shook the country this year, one in the financial capital Mumbai followed by another on September 5 in the national capital.

Prarthana Mitra is a staff writer at Qrius