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Procurement mechanisms for agri produce (Market Intervention scheme (By…
Procurement mechanisms for agri produce
PDS
Procurement for wheat and paddy for PDS undertaken by state govt and FCI
Out of the above total, FCI share is less than 10%
In NE, this mechanism is absent . Farmers are forced to sell below MSP
Price support scheme(PSS)
Central agencies like Nafed can procure for declared MSP including oilseeds, copra, and pulses
Losses incurred are reimbursed
by Union Ministry of Agriculture
Tt1e Government has provided a
guarantee of Rs. 29,000 Cr to Nafed for procurement
Price stabilisation fund
operated by Dept of Consumer affairs, which provides interest free working capital to procuring agency
NAFED, FCI, SFAC procure for buffer stock
losses incurred under the scheme borne by Department of
Consumer Affairs.
Cotton procurement
Operated by Cotton corporation of India(CCI)
losses are fully reimbursed by the
Union Ministry of Textiles
losses in state case are borne by the
State Government.
Market Intervention scheme
By dept of agriculture cooperation and farmers welfare
for perishable commodities, under which specific proposals of State Governments are considered
Centre bears 50% of loss incurred in
operations
proposals can be approved,only if there is 10% increase in production or 10% fall in rates over a normal year in a State
reimbursement of losses is limited to 25% of the value of procurement, including overheads
Has restrictive provisions, hence not many keen
Pradhan Mantri Annadata Aay SanraksHan Abhiyan
3 components
PRICE SUPPORT SCHEME
Here physical procurement
of pulses, oil seeds and copra will be done by
Central nodal agencies.
Besides NAFED, Food
Corporation of India will also take up procurement
of crops under PSS.
Expenditure and losses due to procurement will be borne by centre
Concerns
Centre will findit hard to mobilise funds
Total credit guaranteed under PSS is already 45,550Cr. So if all states apply for NAFED/FCI for procurement, the agencies will fall short of funds
Handling procurement with disposal efficently, is another area
If NAFED and FCI are to forever sell at loss, PSS will become a failure
PRICE DEFICIENCY
PAYMENT SCHEME
Under this, the Centre
proposes to cover
all oilseeds
and pay the farmer
directly into his bank account, the difference
between the MSP and his actual selling/modal price
Farmers who sell their crops
in recognised mandis withinthe notified period will
benefit from it.
Concerns
Scheme doesn't involve any physical procurement of crops as farmers are paid just the difference
PRIVATE PROCUREMENT &
STOCKIST SCHEME (PPSS)
In case of oilseeds, states will have option to roll out PPSS in select districts, where a private player can procure crops at MSP, when market prices drop below MSP
The private player will then be
compensated through a servicecharge, that will be up to a
maximum of 15% of the MSP ofthe crop.
This is for a 2 year period and It involves a spending of Rs.15,053 crore and also additional
government credit guarantee of Rs. 16,550 crore for agencies undertaking procurement