Price Support Scheme (PSS)

Procurement of Mustard, Urad, Millet etc. at MSP

Introduction:

Assurance of a remunerative and stable price environment for growers/farmers is very important for increasing agricultural production and productivity. The market price for agricultural produce many times tends to be unstable and volatile which may result into undue losses to the growers. To ensure remunerative price to the farmers/growers, the Government announces, Minimum Support Prices (MSP) for 22 major agricultural commodities each year for both the Crop seasons after considering the recommendations of the Commission for Agricultural Costs and Prices (CACP). Crops covered under MSP are Paddy, Jowar, Bajra, Maize, Ragi, Arhar, Moong, Urad, Groundnut-in-shell, Soyabean, Sunflower, Seasame, Nigerseed, Cotton, Wheat, Barley, Gram, Masur (lentil), Rapeseed/Mustard seed, Safflower, Jute and Copra.

Besides announcement of MSP, the Government also organizes procurement operations of these agricultural commodities under different schemes through various public and cooperative agencies such as Food Corporation of India (FCI), Cotton Corporation of India (CCI), Jute Corporation of India (JCI), Central Warehousing Corporation (CWC), National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED), National Consumer Cooperative Federation of India Ltd. (NCCF), and Small Farmers Agro Consortium (SFAC). In addition, the State Governments also appoint state agencies to undertake procurement operations under the schemes.

Production and estimated marketable surplus of Mustard Seed in Assam:

As per the statistics of the Directorate of Agriculture, Assam, production of Mustard in Assam during the year 2020-21 is 1,85,175 MT as per the details given below:

Out of the total estimated marketable surplus of 1,85,175 MT, it is proposed to procure 45,700 MT of Mustard under PSS in the State of Assam. In consideration of fund allocated in the budget for the FY 2023024, it is proposed to implement the Scheme in 6districts for procurement of targeted 5000 MT of Mustard through 6 nos. of procurement centres as per the details given below:

ASAMB’s Action Plan:

1. Arrangement of godowns:

As per the guidelines, the warehouse receipt of ASWC will be considered for payment of MSP to the farmers. It is proposed to hire the available godown-space of ASWCin the location of notified procurement centres.

2. Arrangement of manpower:

2nos. Marketing Inspector and 2 nos. supporting staff will be engaged against each procurement centre from the existing employees of ASAMB.

3. Arrangement of gunny bags:

For procurement of 5,000 MT of Mustard 200 bales of gunny bags will be required and that will be arranged through NAFED.

4. Arrangement of Moisture meter and Weighing scale:

For quality check and weighment of Mustard in the procurement centres, it is proposed to procure 17 nos. of Moisture meter and Weighing scale (50 Kg capacity). Process for procurement of Moisture meter and Weighing scale will be initiated after notification of procurement centres by the Govt.

5. Publicity of procurement of Mustard under PSS:

The ASAMB will make adequate publicity of PSS operations of Mustard, such as MSP, FAQ norms, address of procurement centres, procurement period, documents required for the farmers registration, contact details of authorized persons of procurement operations after necessary notification by the Govt.

6. Arrangement of IT hardware:

As the procurement, process will be run through the NAFED’s procurement portal, a laptop and a computer printer in each procurement centre will be required. It is proposed to procure 17 nos. of laptop and computer printer after notification of procurement centres by the Govt.

7. Training and capacity building of manpower:

The ASAMB will organize training programme in collaboration with NAFED for training and capacity building of its manpower to be engaged in the procurement programme after necessary notification by the Govt.

Arrangement of Fund:

Required fund of Rs. 450.00 lakh will be arranged from the allocated amount under SOPD in the budget for the FY 2023-24.

Guidelines of Price Support Scheme:  

The guidelines framed by the Govt. of India for PSS are to be followed by the State Govt./Agencies in procurement of agricultural produce under PSS.

Issues:

Moisture content: Procurement period of Mustard starts from January to March. However, after harvesting, moisture content of mustard is much higher (15% - 18%) in Assam.Due to humid condition, the moisture content remains higher than the permissible level of 8%. The Govt. of Assam may take up the matter with Govt. of India for necessary relaxation in FAQ norms for the benefit of the farmers of the state.

Prevailing market price:

In most of the districts, the prevailing market price of Mustard is as of now is ₹ 4200.00 to ₹ 4800.00 per quintal.

Expected outcome of the scheme:

Benefits of Procurement:  The procurement programme will help enhance the farmers’ income, as envisaged by the Hon’ble Prime Minister of India.

It is assumed that the average volume of Mustard, to be procured from the farmers in 6 nos. of designated procurement centres, is to be 10 qntl. To achieve the target of 5,000 MT of Mustard, procurement to be made from 5,000 farmers approximately. Considering a minimum gap of ₹ 650.00 per qntl. between MSP and local markets, the estimated benefit amounting to ₹ 3.25crore will be transferred directly to the farmers and an individual farmer will be getting a share of ₹ 6,500.00 each. 

This process will not only incentivise the farmers to grow more Mustard for enhanced productivity, but also it may help to grow more processing units. 

Conclusions:

The scaling up of operations of Mustard procurement would result in increased disposable income in the hands of the farmers, who are generally forced to sell their agricultural produce in a throw away price and as such would help the State economy by increase in agricultural GDP. Perhaps, it is pertinent to mention here that the state of Assam is still a laggard in procurement operations as compared to other states such as Rajasthan, Gujarat etc. and that too despite having a sufficient production. As such, the operation of Mustard procurement is urgent need of the hour and would result in incremental benefits to the state economy.