Govt Allocates ₹28,107 Cr for Remaking of PM-AASHA Scheme to Boost Farmer Income and Ensure Price Stability

The government is set to overhaul the PM-AASHA scheme with a substantial funding of ₹28,107 crore until 2025-26. Introduced in September 2018 to ensure Minimum Support Prices (MSP) for farmers during periods of decreasing crop production and escalating food prices, PM-AASHA is geared towards simplifying various initiatives to safeguard the interests of both farmers and consumers.

As part of this reorganization, the government aims to merge the Price Stabilisation Fund (PSF) from the Union Consumer Affairs Department with the Price Support Scheme (PSS) from the Agriculture Ministry. This consolidated scheme, alongside the Market Intervention Scheme (MIS), will be brought under the purview of PM-AASHA.

The primary objective is to improve efficiency by eliminating redundancies and ensuring comprehensive coverage of agricultural commodities to prevent price fluctuations. Niti Aayog had earlier recommended integrated price intervention activities for enhanced efficiency, coordination, and cost-effectiveness. In January 2023, a decision was made to introduce a unified scheme for price support and buffer management by merging PSS and PSF schemes, to be executed by the agriculture ministry.

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Under the proposed merger, the agriculture ministry will oversee the procurement of pulses, oilseeds, and copra at MSP. Simultaneously, the consumer affairs department will handle the non-MSP procurement of horticulture commodities for buffer and market intervention. This strategy aims to provide farmers with a stable and lucrative pricing environment, boost agricultural production and productivity, and ensure reasonable prices for consumers.

Between FY20 and FY23, the government had already allocated ₹26,338 crore for various schemes, including PSS, PSF, MIS, PDPS, and discounted pulses schemes. The overarching goal is to prevent farmers from making distress sales in mandis and establish a balanced price structure that aligns with the overall needs of the economy.

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Looking ahead, industry experts anticipate positive changes in the agriculture sector in 2024, driven by a new policy focusing on research, development, and investments. This shift is expected to reshape agriculture at the rural level.

Gurmukh Roopra, CEO of Namdhari’s Group, envisions agriculture playing a pivotal role in FY25 as the rural demand story unfolds. However, maintaining a subsidy program on fertilizers will be crucial, particularly if oil stabilizes at the $80-85 level, according to Madan Sabnavis, chief economist at Bank of Baroda.

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