Such mechanism will boost crop diversification, says farm cost panel
The government should explore the possibilities of launching a modified version of price deficiency payment scheme (PDPS), which allows only oilseeds farmers to receive upto 25 per cent of the minimum support price (MSP) in case the mandi rates fall below the benchmark rate.
This is one of the several non-price recommendations made by the Commission for Agricultural Costs and Prices (CACP) in its Kharif 2022-23 report.
The PDPS, a brainchild of NITI Aayog member Ramesh Chand, could not take off though introduced in 2018 after the Centre implemented the MSP policy as minimum 150 per cent of the costs of production (A2+Family Labour).
“The commission suggests exploring suitable variants of PDPS to compensate farmers for not growing rice or wheat. The commission is also of the opinion that the success of such crop diversification efforts would inevitably require that the trade policy and price-support policy work in tandem with each other,” CACP said in the report released on Thursday, a day after Cabinet approved its MSP recommendations.
The PDPS scheme says: “the farmer would be paid the difference between the MSP and the monthly modal price/actual sale price subject to a maximum of 25 per cent of the MSP value.” It is only restricted to oilseeds as the government wanted to see the results before expanding to pulses as in these two categories the country is yet to get self sufficiency.
“Efforts should be made to effectively implement PDPS and Private Procurement & Stockist Scheme (PPSS) for oilseeds instead of procurement under Price Support Scheme (PPSS),” CACP said. The PDPS, PPSS and PSS are part of an umbrella PM-AASHA scheme.
According to the report, the average groundnut prices in Gujarat, Rajasthan, Andhra Pradesh and Karnataka were 0.9-6.3 per cent below MSP (₹5,550/quintal), whereas mandi rate was 40.7 per cent above MSP in Tamil Nadu during kharif 2021 marketing season. Mandi prices of soyabean in Madhya Pradesh, Rajasthan and Maharashtra were 42-50 per cent above MSP (₹3,950/quintal) in the same period.
Madhya Pradesh had tried PDPS scheme for soyabean after its launch, but abandoned it next year after uproar by farmers that traders were deliberately keeping prices lower after factoring into account the subsidy to be disbursed by the government.