Yielding little results, does govt need to review PM-AASHA scheme?

Yielding little results, does govt need to review PM-AASHA scheme?

The Commission for Agriculture Costs and Prices (CACP) has once again called for strengthening the different components of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) scheme to ensure remunerative prices to farmers.

The scheme that was launched in September 2018 to ensure remunerative prices to farmers has three components.

It comprises the (i) Price Support Scheme (PSS), (ii) Price Deficiency Payment Scheme (PDPS), and (iii) Pilot of Private Procurement and Stockiest Scheme.

Under the PSS, the overall quantity of procurement by the central government is restricted to 25 per cent of the actual production of the commodity for that particular season.

If any state intends to procure beyond 25 per cent but to a maximum of 40 per cent of production through central agencies, then the quantity will be utilised by the state government for its PDS and other welfare schemes at its own cost.

The commission has repeatedly said that of the three components, only PSS is functioning somewhat efficiently, while the remaining two, deficiency payment and private procurement pilots, have been a non-starter.

“After implementation of PM-AASHA, PSS has made a significant stride in terms of procurement of pulses and oilseeds by NAFED, but PDPS and PPSS have not made much progress. The Commission strongly recommends that PDPS and PPSS can be strengthened in addressing the procurement issues of oilseeds and pulses as physical procurement of these crops is not feasible due to the absence of procurement and market infrastructure unlike that of wheat and paddy,” the Commission said in the latest report.

Even in PSS, there have been allegations of implementation problems and cuts in allocation.

In the Union Budget of 2018-19, around Rs 1,500 crore were allocated for the scheme, which came down to Rs 500 crore in the 2019-20 Budget and further dropped to Rs 400 crore in the 2020-21 Budget.

The explanation given by the government is that the reduction in the Budget is not due to any malaise but the allocation of the annual budget is meant for meeting up the reimbursement of losses incurred in the implementation of schemes and gets revised based on the actual requirements.

“Besides the overall market also responds to the declaration of MSP and government’s procurement operations which results in private procurement on or above the MSP benefitting the farmers for various notified crops,” the government said in a reply made in Parliament.

There have been other implementation issues with the scheme’s PSS component as well.
 

These are mostly related to the disposal of the procured quantity, which makes institutions participating in them wary of having to bear huge losses.

The CACP, in one of its findings, said that disposal or liquidation of stocks of pulses procured under PSS by NAFED has been a challenge as NAFED incurs heavy losses in the open market and the sale of stocks in the market depresses market prices and sentiments.

Therefore, there is an urgent need to address the institutional and infrastructure constraints that hinder price support-linked procurement and to have a long-term sustainable policy for the disposal of stocks.

There are other major constraints as well such as difficulties in arranging storage space near procurement centres and disposal within nine months under the PSS when huge procurement is made. All of these need to be adequately addressed by the government, the Commission observed.

In the case of pilots on private procurement and stockist schemes, there were plans to conduct as many as eight pilots for the project.

The purchases had to be mandatorily at MSP, for which the private players were to be granted 15 per cent of the crop’s notified MSP as a services charge while all other expenses etc had to be borne by the private party themselves.

The responsibility of disposal of the procured commodity was with the private players and so was handling and transportation expenditure, while the state governments were required to provide a favourable environment for the operation of the private player through lowering or waiving mandi fees etc.

However, little has been known about the progress of this component of PM-ASHAA ever since it was launched sometime in 2017. By all available sources, it hasn’t evoked a great response.

In the case of the price deficiency payment component of the scheme, other than in Haryana, the scheme isn’t operational anywhere else in the country.

Madhya Pradesh, which pioneered the scheme naming it ‘Bhawantar Bhugtan Yojana’ has since moved out of it with no plans of going back again.