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The NITI-Aayog has initiated discussions on putting in place a system to fix minimum support price (MSP) for different crops.
A consultation meeting to discuss various options was held on Friday chaired by the NITI-Aayog Vice-Chairman Rajiv Kumar.
The move comes following an announcement in the Budget by Finance Minister Arun Jaitley that the Aayog will work with States to finalise a fool-proof mechanism to ensure farmers get the MSP even if market prices fall.
Three options
According to an official release, three options were discussed at the meeting including a market assurance scheme, a price-deficiency procurement scheme and a private procurement and stockist scheme.
“The market assurance scheme proposes procurement by States and compensation of losses up to certain extent of MSP after the procurement and price realisation out of sale of the procured produce,” said the release.
Meanwhile, under the price deficiency procurement scheme, if the sale price is below a modal price then the farmers may be compensated to the difference between MSP and actual price subject, which would not exceed 25 per cent of the MSP.
Private procurement
Under the third option, procurement would be done by private entrepreneurs at MSP and the government would provide some policy and tax incentives to these entrepreneurs.
The Minister of State for Agriculutre Gajendra Singh Shekhawat said that States can adopt one or more options depending on their requirements.
“The private procurement and stockist scheme offers great promise as it reduces the fiscal implications for the government, involves private entities as partners in agriculture marketing and improves the competition in the market,” said the release, adding that it would also limit the government’s liabilities for storage and post procurement management and disposal are also avoided.
“However, all the three options may not be implemented for the same crop,” it said, adding that it was decided to modify the concepts quickly on the basis of the suggestions of the States and finalise the mechanism as early as possible preferably by end of this month.
Rajiv Kumar also asked all the States to immediately modify the APMC acts and implement the Model APLMC Act, 2017.
The meeting was also attended by officers from the Ministries of Agriculture, Finance and Food and Public Distribution, the NITI-Aayog, Prime Minster Office and State governments.
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