The Commission for Agricultural Costs and Prices or CACP, the organization that recommends MSP for crops, has advised the Centre to launch a scheme for commercial crops wherein growers are paid directly if the market price drops below a particular level.
The proposed scheme, like the one launched in Madhya Pradesh two years back, will support farmers without distorting the market.
Chairman of CACP, Vijay Paul Sharma informed media that the scheme can work well when all the key producing states participate simultaneously & the procurement window is at least for 6 months.
He said, “Every state must execute this scheme simultaneously so that the beneficiaries are farmers only & not traders or middlemen who purchase produce from other state at low cost & get the benefit in the state where the scheme is being implemented. This will also curb prices”.
Sharma told that the government should allow farmers sell their produce to traders & compensate them only when market rate is less than minimum support price.
He added that so as to facilitate more orderly marketing of crops & stagger market arrivals beyond the procurement season, cultivators should be motivated and incentivized to store their produce in recognized warehouses & provided loans against warehouse receipt to meet cash flow requirements without having to sell their produce when market rates are typically at harvest-time lows. This will allow the growers to delay the sale of produce until more favourable market conditions come out.
He said, “In fact, such farmers must be entitled to get the PDPS benefit, if market prices in later months are below the minimum support price. And if market prices are higher than the MSP then producers can opt to sell in the open market & take advantage of high prices”.
The Centre already has PDPS scheme of PM-AASHA wherein direct payment of the difference between MSP & selling price is made to pre-registered growers selling their produce in the notified market yard via a transparent auction process. The scheme does not involve any physical procurement of crops.
