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NEW DELHI: The Cabinet has allowed gradual entry of private companies in procurement of foodgrains and sanctioned 31,603 crore for two schemes to ensure farmers are able to sell their produce at the minimum support price (MSP).
These initiatives are part of the Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PMAASHA) cleared by the Cabinet, which the government said was an unprecedented step taken to ensure higher income of farmers with the help of robust procurement in coordination with states.
The Cabinet also raised the price of ethanol for state oil firms by 25 per cent, to help sugarcane farmers.
“Cabinet has decided that participation of private sector in procurement operation needs to piloted so that on the basis of learnings the ambit of private participation in procurement operations may be increased,” the government said in a statement.
Pranav Adani, director - Adani Enterprises, said that direct procurement by private sector should help in improving transparency in price discovery for farmers, stabilising and augmenting farmers’ income by increasing competition for their produces and reducing inefficiency by curtailing role of the middlemen.
“Once the farmer has better visibility on his income, agriculture will become attractive for entrepreneurs, thereby encouraging investments in all facets of agriculture like cultivation, storage, logistics, etc.
resulting in enhanced productivity.”
Adani said the success of the pilot scheme would depend on the mechanism to reimburse the difference between the support price and the market price to private agencies.
“This has been the shortcoming of such initiatives in the past.
I believe it is a novel step to achieve our country’s vision to double farmers’ income by 2022,” he said.
The private players will be given maximum service charges up to 15 per cent of the notified MSP.
Agriculture minister Radha Mohan Singh said that for oilseeds, states have the option to roll out private procurement stockist scheme (PPSS) on pilot basis in selected districts.
“The pilot district or selected APMC(s) of district will cover one or more crop of oilseeds for which MSP is notified.
The selected private agency shall procure the commodity at MSP at the notified markets during the notified period from registered farmers in consonance with the PPSS guidelines, whenever the prices in the market falls below the notified MSP and whenever authorised by the state government to enter the market,” said the government release.
The other existing schemes of Food ministry’s - procurement of paddy, wheat and coarse grains and of Ministry of Textile’s for cotton and jute will be continued to provide MSP to farmers.
