Business

Govt Considering Rs 500 Cr 'Market Assurance Scheme' To Assist Farmers

NEWS WORLD INDIA | 0
4366
| February 4 , 2018 , 18:18 IST

The Government of India is preparing to launch 'Market Assurance Scheme' with a whole fund of Rs 500 crore under which states will procure crops if prices fall below the minimum support price (MSP), according to sources. The tendered scheme will strengthen procurement and ensure farmers do not suffer from marketing inefficiencies.

Sources say a concept paper in this regard has been finalised by the agriculture ministry in consultation with states and the union territories. As per the proposal, the ownership of the Market Assurance Scheme (MAS), including the decision to procure at MSP, and its actual operation will be vested with states. As notified by the government, if the prices fall below the MSP States, will procure crops (except wheat and paddy).

States will be responsible to deal with and dispose of the procured commodities in an appropriate manner. However, if any losses incurred in these operations by the states will be compensated by the central government up to a maximum value of 40 percent at the MSP. The centre has estimated that compensation support of up to a maximum 30 percent would be adequate to cover the losses sustained, if any, and serve as an incentive to states on the new scheme.

At present, wheat and rice are procured at MSP by state agencies and FCI. When prices of other crops fall below MSP, the government operationalizes the Price Support Scheme (PSS) under which funds are given to states for procurement at a support price. There is also a price stabilization fund which is used to create the buffer stock of pulses.