Will PM-AASHA Truly Stabilize Farmers’ Incomes, or Is It Just a Short-Term Fix?

21 December 2024, New Delhi: The Government of India has introduced the Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA) with the aim of enhancing farmers’ incomes by providing price assurance for their crops. The scheme focuses on major agricultural commodities, ensuring that farmers are paid a minimum support price (MSP) for their produce, which is intended to encourage greater investment in farming and boost production. PM-AASHA, which was launched in September 2018, includes components such as the Price Support Scheme (PSS), the Price Deficiency Payment Scheme (PDPS), and the Market Intervention Scheme (MIS). These initiatives aim to reduce post-harvest distress selling, support crop diversification, and ensure financial stability for farmers.

The core of PM-AASHA lies in its MSP policy, which guarantees a minimum price for 24 crops across major cereals, pulses, oilseeds, copra, cotton, and jute during the Kharif and Rabi seasons. The government sets MSP at 1.5 times the cost of production (CoP), providing a cushion for farmers against market fluctuations. However, while this policy may seem beneficial on paper, one must ask—does it truly address the long-term challenges farmers face in a volatile market?

In practice, PM-AASHA seeks to protect farmers, particularly small and marginal ones, from price crashes during the harvest season. For example, during the 2023-24 Rabi season, the government procured over 6.4 LMT of pulses worth ₹4,820 crore at MSP from around 2.75 lakh farmers. Similarly, during the ongoing Kharif season, despite market prices of soybeans falling below MSP, the government intervened, procuring 5.62 LMT of soybeans valued at ₹2,700 crore. This intervention is undoubtedly beneficial in the short term. Yet, it raises questions about the long-term sustainability of such support. How often can the government step in to stabilize market prices, and is this approach sustainable in the face of ever-increasing production costs and growing demand?

One of the key components of PM-AASHA is the Price Support Scheme (PSS), which allows the government to procure pulses, oilseeds, and copra directly from farmers at MSP, provided state governments agree to exempt procurement from mandi taxes. However, the procurement ceiling is limited to 25% of a state’s total production for the season, with the option to extend it by 25% of national production after approvals. While this is designed to ensure fair procurement, it also raises concerns about the extent of market intervention—especially when the cap on procurement could leave many farmers without buyers for their crops.

The Price Deficiency Payment Scheme (PDPS) is another option introduced to support oilseed farmers, where the government directly compensates farmers for the difference between the market price and the MSP. While this can be a helpful mechanism, its reliance on farmers’ registration and participation in a transparent auction process creates another layer of complexity. Is the implementation of PDPS smooth enough to ensure that all eligible farmers benefit from it?

A potentially game-changing component of PM-AASHA is the Market Intervention Scheme (MIS), which addresses price fluctuations in perishable crops like tomatoes, onions, and potatoes (TOP crops). These crops often experience price volatility, with prices in producing states being much lower than in consuming states. The MIS allows for differential payments between the market intervention price and the selling price, offering farmers a chance to cover losses. This scheme, while beneficial, brings up questions about its reach and effectiveness. Is it truly capable of addressing price disparities in every part of the country, or will it fail to cover areas where farmers still struggle to secure fair prices for their produce?

PM-AASHA certainly appears to be a much-needed lifeline for millions of farmers, particularly small and marginal ones who are vulnerable to market uncertainties. However, its real-world impact on farmers’ financial stability is still under scrutiny. While the scheme ensures that farmers are paid MSP or are compensated for price deficiencies, the question remains: Can PM-AASHA truly empower farmers to become self-reliant and escape the clutches of market volatility, or is it simply a temporary fix to a much deeper problem?

The Government of India’s interventions under PM-AASHA provide critical short-term relief, but there is a pressing need for long-term solutions to make farming truly sustainable and profitable. Will PM-AASHA evolve in a way that addresses the root causes of farmer distress, or will it remain a stopgap measure in a system that continues to undervalue agricultural labor and produce?

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