THE BJP-ruled Centre is burning the midnight oil to woo the rural voter at the fag end of its tenure, and ahead of Assembly elections in Rajasthan, Madhya Pradesh and Chhattisgarh. More than four years after the 2014 General Election, the first major poll promise made to the farmers was only fulfilled this July. The government raised the MSP of Kharif crops to one-and-a-half times their input cost. The MSP for crops barring paddy and wheat has little significance for farmers in the absence of an effective procurement policy. With the Kharif harvest only days away, the Union Cabinet has made a last-ditch attempt to address the procurement issues. However, the challenge of the MSP regime still remains — the lack of a foolproof mechanism to deliver aid to every farmer.
The ‘umbrella’ scheme — Pradhan Mantri Annadata Aay Sanrakshan Abhiyan — is, in fact, an amalgamation of three procurement options. States may choose either of the three options when prices of crops fall below the MSP. These options are, however, not universal.
The ‘Price Deficiency Payment’ scheme is apparently proposed for oil seeds, which copy-pastes the ‘Bhavantar Bhugtan Yojana’ prevalent in Madhya Pradesh, where the state pays the farmer the price difference between the MSP and the market price if the crop is sold below the MSP. Although the scheme has the potential to resolve several procurement and storage-related issues, it can be also be manipulated. The scheme is also restrictive as it is applicable only for 25 per cent of a state’s oilseed production. The other option of involving the private sector is so far a pilot project and seemingly restricted to oil seeds. The endeavour is, therefore, to check cooking oil imports. The farmer should not expect any transformative change due to this policy. The need of the hour is to have an integrated and dynamic farm policy based on market intelligence that would encourage farmers to undertake crop diversification with access to the market without the middleman.