Price Deficit Payment Scheme
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2017
Rahul Noronha , The agricultural vote bank “India Today” 18/9/2017
Madhya Pradesh became the first state in the country to bring in a 'Bhaavantar Yojana' or 'price deficit payment' scheme for agricultural produce, making it possible for the government to bail out farmers without having to buy their produce. The scheme will also help the government avoid the goof-ups and accusations of mismanagement of procured stock as happened recently in the procurement of 8.76 lakh tonnes of onions.
Cleared by the state cabinet, the scheme will enable the government to pay the difference between the modal price and the MSP (minimum support price) of a crop in case prices fall below the MSP. The modal price will be the average price of an agricultural commodity over a two-month period in MP and two other states where it is grown. Eight crops will be covered, including soyabean, of which MP is the biggest producer.
A brainchild of NITI Aayog member Ramesh Chand, the scheme was earlier tried out on a pilot basis in Goa and, for pulses, in MP. The scheme comes close on the heels of massive mismanagement in procurement of onions-a decision seen as a kneejerk reaction to the farmers' agitation in June. Thousands of tonnes of onion were procured by Markfed (MP State Cooperative Marketing Federation Ltd), only to be dumped and left to rot after the rains. The loss suffered by the exchequer has been estimated at nearly Rs 500 crore. The government purchased the onions at Rs 8 per kg and sold a part of it through the PDS network at Rs 2 per kg. The remainder went for as little as 10 paise a kg after the rains started. A GM of the MP state civil supplies corporation, S.K. Soni, was arrested after a sting operation by the INDIA TODAY news channel showed him fixing a deal to sell procured onions to traders at depressed rates.
Worse still, nearly 25,000 tonnes of onions are still 'missing', with Markfed extending excuses like 'moisture loss', something which even its parent body, the department of cooperation, is not buying. The losses this year were a repeat of the 2016 procurement mess by Markfed, albeit on a much bigger scale. In 2016, 72 per cent of the 1.04 lakh tonnes of onions procured were destroyed while the remaining 27,000 tonnes were sold at Rs 3 per kg. "Onion procurement was an emergency situation," says Markfed MD Gyaneshwar Patil. "It was done during the rains and Markfed has no facilities to store, nor any expertise in procurement. We can't blame anyone for the losses due to damage. However, if other anomalies are detected, action will be taken."
Sensitive to the flak, the Shivraj Singh Chouhan government rolled out the Bhaavantar Yojana. State elections are due in 2018 and the farming community has been the backbone of the CM's support base. There were already concerns after the farmers' agitation in June. The scheme still doesn't address the issue of non-remunerative prices for perishable agricultural produce, a plank of the farmers' agitation. Also, the scheme doesn't deal with inefficiencies at the mandis or cartelisation, both of which are responsible for farmers not getting their due. "We will address mandi reforms administratively in the months to come," says principal secretary, agriculture, Rajesh Rajora.
