PM-Aasha makes hardly any difference to MSP purchases

Published: February 25, 2019 5:22:42 AM

Under the PM-Aasha guidelines, the Centre allows procurement of 25% of production at MSP and bear the entire losses, if any, in selling these oilseeds and pulses in the market.

In 2018 kharif, the government would have spent Rs 19,255 crore had it purchased all the sanctioned quantity of oilseeds and pulses. (Representational photo)

By Prabhudatta Mishra

Assured price deficiency support to farmers under the much-touted PM-Aasha scheme announced in September has made little change to the amount of pulses and oilseeds (P&O) procured by the government or its price-support budget.

As on February 20, national-level procurer Nafed purchased just 16.23 lakh tonne of kharif 2018 produce – just 5% of the total P&O crop in the season, or 43% of the quantity sanctioned for procurement, at a cost of Rs 8,970 crore. While at best another 4 lakh tonne of the produce (mostly tur) will be purchased under Nafed’s minimum support price (MSP) operations in the current purchase season (procurement of all crop except tur is almost complete), purchases will still be about a quarter less than 26 lakh tonne during kharif 2017.

Sources said Nafed’s total expenditure on procurement for kharif 2018 could turn out to be around Rs 11,250 crore; in financial year 2017-18, it had expended Rs 13,596 crore for procurement, mostly kharif 2017 crop but also small amounts of the rabi 2016 produce.

Mandi prices of tur are now ruling 8-22% below its MSP in major production centres where procurement continues, Agmarknet data show. After the official purchase of tur was allowed, the average mandi rate in Kurnool, Andhra Pradesh, was 22.4% below the MSP, while in Junagadh, Gujarat, it was 7.6% lower on February 20.

While PM-Aasha also comprises a price deficiency support scheme that doesn’t involve physical procurement of the produce, it hasn’t picked up anywhere except in Madhya Pradesh.

“We expect the total procurement of kharif oilseeds and pulses to be around 20 lakh tonne this year, as about 4 lakh tonne more tur is likely to be purchased under MSP operations,” Nafed managing director Sanjeev Kumar Chadha told FE. He said prices of tur have been improving and if mandi rates reach around MSP level of Rs 5,675 a quintal, the objective will be fulfilled.

Under the PM-Aasha guidelines, the Centre allows procurement of 25% of production at MSP and bear the entire losses, if any, in selling these oilseeds and pulses in the market. In 2018 kharif, the government would have spent Rs 19,255 crore had it purchased all the sanctioned quantity of oilseeds and pulses.

“Though the government says money is not a problem, the real reason behind slow procurement is the huge expenditure it involves. Because, once these crops are purchased, it is difficult to unlock their value as the agencies will take at least two years to dispose of the stocks from the date of purchase. There is no shortage of pulses now,” an official said on condition of anonymity.

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