Lok Sabha Question No. 259 (STARRED), answered on 2025-03-18
Subject: Role of Private Agencies in Agricultural Procurement
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Shri P V Midhun Reddy

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE AND FARMERS WELFARE

## LOK SABHA STARRED QUESTION NO. 259

TO BE ANSWERED ON THE 18 TH  MARCH, 2025

## ROLE OF PRIVATE AGENCIES IN AGRICULTURAL PROCUREMENT

*259.  SHRI P V MIDHUN REDDY:

Will  the  Minister  of  AGRICULTURE  AND  FARMERS  WELFARE क ृ िष एवं िकसान

क̵  याण मंũी be pleased to state: (a) the  manner  in  which  private  agencies  are  being  engaged  to  procure agricultural products under the PM-AASHA initiative; (b) the details of the criteria used to select these agencies; (c) the measures that are in place to ensure transparency and fairness in the procurement process conducted by private agencies; and the manner in which the Government plans to balance private procurement

(d) with public support schemes to ensure that farmers' interests are protected?

## ANSWER

THE MINISTER OF AGRICULTURE AND FARMERS WELFARE क ृ िष एवं िकसान क̵  याण मंũी (SHRI SHIVRAJ SINGH CHOUHAN)

(a) to (d) : A statement is laid on the table of the House.

## STATEMENT  IN  RESPECT  OF  PARTS  (a)  TO  (d)  OF  THE  LOK  SABHA STARRED QUESTION NO. 259 FOR 18 TH  MARCH, 2025 REGARDING ROLE OF PRIVATE AENCIES IN AGRICULTURAL PROCUREMENT.

(a) to (d): The Government of India approved the PM -AASHA scheme in 2018 to  be  implemented  during  14th Finance  Commission  Cycle.  The  Ministry administered the scheme of Pradhan Mantri Annadata Aay SanraksHan Abhiyan PM -AASHA ) with its components of Price Support Scheme ( PSS), Price Deficit Payment Scheme ( PDPS ) and pilot of Private Procurement & Stockist Scheme (PPSS ) to provide remunerative price to the farmers of notified pulses, oilseeds and  copra.  Pilot  of  Private  Procurement  Stockist  Scheme  (PPSS)  had  to  be implemented  by  the  States / UTs  for  the  procurement  of  oilseeds from  preregistered  farmers  in  district / selected  Agriculture  Produce  Market  Committees (APMCs) of district involving the participation of selected private agencies. Such procurement had to be undertaken by private agencies directly from pre-registered farmers. However, since private agencies did not show any interest to undertake procurement of oilseeds at  MSP on behalf of the Government from any of the states, the Government has decided to discontinue it  from 2024-25 onwards while approving  the  continuation  of  the  integrated  Pradhan  Mantri  Annadata  Aay SanraksHan Abhiyan (PM-AASHA) during the 15th Finance Commission Cycle up to 2025-26.

The  integrated  Scheme  of  Pradhan  Mantri  Annadata  Aay  Sanrakshan Abhiyan  (PM-AASHA)  now  comprises  of  Price  Support  Scheme  (PSS),  Price Deficiency Payment Scheme (PDPS), Market Intervention Scheme (MIS) and Price Stabilization Fund (PSF). The integrated scheme of PM-AASHA aims to bring-in more effectiveness in the implementation of procurement operations that would not only help in providing remunerative prices to the farmers for their produce but also control the price volatility of essential commodities by ensuring their availability at affordable  prices  to  consumers.  Department  of  Agriculture  &  Farmers'  Welfare (DA&FW) implements  PSS, PDPS and MIS components of PM AASHA while Department of Consumer Affairs administers the PSF component. The mode of implementation of PSS, PDPS and MIS are as follows:-

## i. Price Support Scheme (PSS):

- (a) PSS is implemented on the request of the State Govt./ UT that agrees to exempt  from  levy  of  Mandi  tax  on  the  procurement  of  notified  pulses, oilseeds  and  copra  and  make  arrangements  like  booking  of  Central Warehousing Corporation (CWC)/ State Warehousing Corporation (SWC) Godowns/scientific  storage  facility,  identification  of  procurement  centres, arrangement  of  gunny  bags,  GPRS  enabled  transportation  facilities, weighing machines. Moisture/foreign matters/oil content testing machines etc.  in  consultation  with  Central  Nodal  Agencies  (CNAs)  like  National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) and National  Co-operative  Consumers'  Federation  of  India  Ltd.  (NCCF)  and State level agencies. The State shall create revolving fund atleast for PSS operations  etc.  as  required  under  the  guidelines  of  the  scheme.  It  is

implemented within the stipulated period as and when the market prices of agricultural commodities fall below the notified MSP during peak harvesting period to provide the remunerative price to the farmers. The procurement of the notified pulses, oilseeds and copra conforming to the prescribed Fair Average  Quality  (FAQ)  is  undertaken  by  the  Central  Nodal  Agencies (CNAs) at  the  MSP  directly  from  the  pre-registered  farmers  through  the State level agencies.

- (b) From the procurement year 2024-25, the sanction for the procurement of notified Pulses, Oilseeds and Copra under PSS is given to the State/UT initially  upto  a  maximum  of  25%  of  the  production  of  the  State  for  that particular  season.  Subsequently,  if  the  State/UT  achieves  the  overall procurement  against  sanctioned  quantity  and  further  intends  to  procure more beyond the  sanctioned  quantity,  the  proposal  for  the  procurement under  the  PSS  is  put  up  for  the  consideration  of  the  Committee  of Secretaries  (CoS)  restricted  upto  a  maximum  of  25%  of  the  national production. Further, in order to incentivize the farmers for its contribution in the enhancement of domestic production and to reduce the dependence on import,  the  Government  has  allowed  the  procurement  of Tur,  Urad  and Masur under PSS equivalent to 100% of the production of the State for the procurement year 2023-24 and extended it further for the year 2024-25 also. This arrangement has been in the interest of the farmers.

## ii. Price Deficit Payment Scheme (PDPS):

PDPS envisages the direct payment of the price difference between the MSP and the selling / modal price in notified market upto 15% of MSP value (including 2% administrative cost) by the Central Government to the preregistered farmers selling the oilseeds upto 40% of its production to the prescribed Fair Average Quality (FAQ) in the notified market yard through a  transparent  auction process within  the  stipulated  period.  However,  the States/UTs  have  the  option  to  implement  either  PSS  or  PDPS  for  the particular oilseeds for the particular year/season. If any State is willing to cover quantities beyond 40%, they can do so from it's resources.

## iii. Market Intervention Scheme (MIS):

Market Intervention Scheme (MIS) is implemented on the request of the State/UT Government for the procurement of various perishable agricultural/horticultural  commodities  such  as  Tomato,  Onion  and  Potato etc. for which Minimum Support Price (MSP) is not applicable and there is a reduction of prices in the market by atleast 10% over the rates of previous normal season in the States/UTs so that the farmers are not constrained to make distress sales of their produce. It is implemented if the States/UT is willing to share the total loss in the ratio of 50:50 between the State and Centre whereas in case of North-Eastern States, the losses to be shared between  the  Centre  and  State  on  75:25  basis.  The  procurement  is undertaken  by  the  State  designated  agency  upto  25%  of  the  State's production  of  the  particular  crop  of  the  prescribed  FAQ  at  fixed  Market Intervention Price (MIP) as determined by MIS Committee plus permitted overheads expenses, which is generally of 25% of MIP so that the farmers are  not  constrained  to  make  distress  sales  of  their  produce.  However, States/UTs have also an option to make the differential payment between the MIP and Sale Price to the farmers. The total procurement value will be the cost of procured quantity at Market Intervention Price (MIP) determined by MIS Committee plus permitted overheads expenses, which is generally of  25%  of  MIP.  However,  States/UTs  have  also  an  option  to  make  the differential  payment  between  the  MIP  and  Sale  Price  to  the  farmers. Moreover, if there is a price difference of TOP crops (Tomato, Onion and Potato) between the producing and consuming states, the Govt. approves the transportation and storage of these crops from the producing state to the  consuming  states  through  the  Central  Nodal  Agencies  (CNAs)  like NAFED  and  NCCF  for  which  the  expenses  is  reimbursed by the Government to these agencies.

## iv. Price Stabilization Funds (PSF):

Department  of  Consumer  Affairs  Ministry  of  Consumer  Affairs,  Food  & Public Distribution implements PSF to mitigate the hardships on consumers against  the  price  volatility  of  agri-horticultural  commodities.  The  basic objective of PSF scheme is to protect the consumers from extreme volatility in prices of agri-horticultural commodities and to ensure the essential food commodities available at affordable prices. In order to maintain the buffer stock of pulses, the procurement of notified pulses is undertaken at Market Price by NAFED and NCCF.

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