Managing enough food in the domestic market has been the prime focus of the governement since Independence. Meeting the physical target of food together with the challenge of enabling Indians to procure food for their consumption was also there. Over the year, we see the government devising various ways and means to handle the twin challenges. Once, the country joined the WTO, a new need was felt-producing surplus and competing with the world out there so that the benefits of globalization could be reaped by the agriculture sector, too

Minimum Support Price

Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices. The minimum support prices are announced by the Government of India at the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP). MSP is price fixed by Government of India to protect the producer - farmers - against excessive fall in price during bumper production years. The minimum support prices are a guarantee price for their produce from the Government. The major objectives are to support the farmers from distress sales and to procure food grains for public distribution. In case the market price for the commodity falls below the announced minimum price due to bumper production and glut in the market, govt. agencies purchase the entire quantity offered by the farmers at the announced minimum price.

Minimum support prices are currently announced for 24 commodities including seven cereals (paddy, wheat, barley, jowar, bajra, maize and ragi); five pulses (gram, arhar/tur, moong, urad and lentil); eight oilseeds (groundnut, rapeseed/mustard, toria, soyabean, sunflower seed, sesamum, safflower seed and nigerseed); copra, raw cotton, raw jute and virginia flu cured (VFC) tobacco.

Such minimum support prices are fixed at incentive level, so as to induce the farmers to make capital investment for the improvement of their farm and to motivate them to adopt improved crop production technologies to step up their production and thereby their net income. In the absence of such a guaranteed price, there is a concern that farmers may shift to other crops causing shortage in these commodities.

A pilot project under the Direct Payment Deficiency System (DPDS) for paying MSP guarantee for the cotton farmers has been initiated at Hinganghat taluka of Maharashtra in 2015. Under this system, the farmers will directly get the amount which is the difference between the Minimum Support Price (MSP) and the market price, should the market price fall below the MSP. For availing of the benefit, farmers would have to present proof of cotton sold at Agriculture Produce Market Committee yards, plus other papers such as ownership document, yield estimation and other details. If the pilot is successful, the DPDS would be rolled out in all cotton growing regions, as per the present decision. DPDS is essentially a mode of direct benefit transfer to cotton farmers.

Historical context

The emergence of agricultural Price Policy in India was in the backdrop of food scarcity and price fluctuations provoked by drought, floods and international prices for exports and imports. This policy in general was directed towards ensuring reasonable food prices for consumers by providing food grains through Public Distribution System (PDS) and inducing adoption of the new technology for increasing yield by providing a price support mechanism through Minimum Support Price (MSP) system.

In recognition of the importance of assuring reasonable produce prices to the farmers, motivating them to adopt improved technology and to promote investment by them in farm enterprises, the Agricultural Prices Commission (renamed as the Commission for Agricultural Costs and Prices in 1985) was established in 1965 for advising the Government on agricultural prices policy on a continuing basis. The thrust of the policy in 1965 was to evolve a balanced and integrated structure to meet the overall needs of the economy and with due regard to the interests of the producers and the consumers. The first Commission was headed by Prof M L Dantwala and in its final report the Commission suggested the Minimum Support Prices for Paddy.

Method of Calculation

In formulating the recommendations in respect of the level of minimum support prices and other non-price measures, the CACP takes into account a comprehensive view of the entire structure of the economy of a particular commodity or group of commodities. Other Factors include cost of production, changes in input prices, input-output price parity, trends in market prices, demand and supply, inter-crop price parity, effect on industrial cost structure, effect on cost of living, effect on general price level, international price situation, parity between prices paid and prices received by the farmers and effect on issue prices and implications for subsidy. The Commission makes use of both micro-level data and aggregates at the level of district, state and the country.

Supply related information - area, yield and production, imports, exports and domestic availability and stocks with the Government/public agencies or industry, cost of processing of agricultural products, cost of marketing - storage, transportation, processing, marketing services, taxes/fees and margins retained by market functionaries; etc. are also factored in.

Report of National Commission for Farmers (NCF) had recommended that MSP should be at least 50% more than the weighted average cost of production. However, this had not been accepted by the Government.

Procurement at MSP

Farmers are made aware of the procurement operations by way of advertisements like displaying banners, pamphlets, announcement for procurement and specification in print and electronic media. Some States have taken steps to pre-register farmers for ensuring procurement from them through a software system. Keeping in view the procurement potential areas, procurement centres for MSP operations are opened by Government agencies, both Food Corporation of India (FCI) and State Government, after mutual consultations.

Procurement centres are opened by respective State Govt. Agencies/ FCI taking into account the production, marketable surplus, convenience of farmers and availability of other logistics / infrastructure such as storage and transportation etc. Large number of temporary purchase centres in addition to the existing Mandis and depots/godowns are also established at key points for the convenience of the farmers.
The Govt. agencies also engage Co-operative Societies and Self Help Group which work as aggregators of produce from farmers and bring the produce to purchase centres being operated in particular locations/areas and increase outreach of MSP operations to small and marginal farmers. These Co-operative Societies are in addition to the direct purchases from farmers.
Co-operative societies/Self Help Groups are engaged in many States like Bihar, Chhattisgarh, Odisha, Maharashtra, Karnataka, Jharkhand and Rajasthan. Whereas, in some states like Punjab and Haryana, the Government of India has permitted the State Governments to engage Arhatiyas for procurement of foodgrains from the farmers on payment of commission. These steps have been taken by Government of India so that Govt. agencies can procure maximum foodgrains directly from farmers by expanding out- reach of MSP benefit to farmers.
Food Corporation of India (FCI) is the designated central nodal agency for price support operations for cereals, pulses and oilseeds. Cotton Corporation of India (CCI) is the central nodal agency for undertaking price support operations for Cotton.

Market Intervention Scheme

Similar to MSP, there is a Market Intervention Scheme (MIS), which is implemented on the request of State Governments for procurement of perishable and horticultural commodities in the event of fall in market prices. The Scheme is implemented when there is at least 10% increase in production or 10% decrease in the ruling rates over the previous normal year. Proposal of MIS is approved on the specific request of State/UT Government, if the State/UT Government is ready to bear 50% loss (25% in case of North-Eastern States), if any, incurred on its implementation. Under MIS, funds are not allocated to the States. Instead, central share of losses as per the guidelines of MIS is released to the State Governments/UTs, for which MIS has been approved based on specific proposals received from them.

Procurement Prices

In 1966-67, the Government of India announced a 'procurement price' for wheat, too-a bit higher than its MSP (the purpose being security of food procurement for requirement of the PDS). The MSP was announced before sowing, while the procurement price was announced before harvesting-the purpose was encouraging the farmers to sell a bit more and get encouraged to produce more. But this increased price hardly served the purpose as a suitable incentive to farmers-it would have been better had it been announced before sowing and not after harvesting. That is why since the fiscal 1968-69 the government announced only the MSP, which is considered the effective procurement price, too

issue price

The price at which the Government of India allows offtake of foodgrains from the FCI (the price at which the FCI sells its foodgrains). The FCI has been fetching huge losses in the form offood subsidies. The foodgrains procured are transported to the godowns of the FCI located across the country (counted in the buffer stock). From here they head to the sale counters-to the TPDS or Open Market Sale. The transportaion, godowning, the cost of maintaining the FCI, carriage losses, etc., make the foodgrains costlier (the additional expenses other than the MSP is known as the 'economic cost of foodgrains'). To make the food grains affordable to the consumers, the issue prices for foodgrains are set lower than the total cost of procurement and distribution-the gap converts into the 'food subsidy'.

buffer stock

India has a policy of maintaing a minimum reserve of foodgrains (only for wheat and rice) so that food is available throughout the country at affordable prices round the year. The main supply from here goes to the TPDS (the PDS was restructured as the Targeted PDS in 1997) and at times goes for Open Market Sale to check the rising prices, if needed.

The concept of buffer stock was first introduced during the IVth Five Year Plan (1969-74).

Buffer stock of food grains in the Central Pool is maintained by the Government of India (GOI) / Central Government for

i. meeting the prescribed minimum buffer stock norms for food security,

ii. monthly release of food grains for supply through Targeted Public Distribution System (TPDS) and Other Welfare Schemes (OWS),

iii. meeting emergency situations arising out of unexpected crop failure, natural disasters, etc., and

iv. price stabilisation or market intervention to augment supply so as to help moderate the open market prices.

Decentralised Procurement Scheme

The Scheme of Decentralised procurement (DCP) refers to the manner of procurement of foodgrains to the central (federal) government stock, through the state agencies, rather than through the central (Federal) agency of Food Corporation of India (FCI).

The foodgrains are procured at the Minimum Support Price (MSP) declared by the Central Government for ensuring (a) a cost covering price for the producing farmers and to
(b) effect distribution of these foodgrains at affordable prices to the needy and under-privileged through the public distribution system (PDS) of the country so as to ensure food security.

National Food Security Mission (NFSM)

In view of the stagnating food grain production and an increasing consumption need of the growing population, Government of India has launched this Centrally Sponsored Scheme, ‘National Food Security Mission’ in October 2007.
The Mission is being continued during 12th Five Year Plan with new targets of additional production of food grains of 25 million tons of food grains comprising of 10 million tons rice, 8 million tons of wheat, 4 million tons of pulses and 3 million tons of coarse cereals by the end of 12th Five Year Plan

Major Components of NFSM

1> National Food Security Mission – Rice (NFSM-Rice)
2> National Food Security Mission – Wheat (NFSM-Wheat)
3> National Food Security Mission – Pulses (NFSM-Pulses)
4> National Food Security Mission – Coarse cereals (NFSM-Coarse cereals)
5> National Food Security Mission – Commercial crops (NFSM-Commercial crops)

Macro Management of Agriculture (MMA)

The MMA was revised in 2008 to improve its efficacy in supplementing/complementing the efforts of the states towards enhancement of agricultural production and productivity. It also provides opportunity to draw upon agricultural development programmes out of ten sub-schemes relating to crop production and natural resource management, and give it the flexibility to use 20 per cent of resources for innovative components.
The revised MMA scheme has formula-based allocation criteria and provides assistance in the form of grants: loan to the states/UTs on 90:10 ratio basis, except in case of the north-eastern states where the central share is 100 per cent grant.

Rashtriya Krishi Vikas Yojana (RKVY)

Introduction

Concerned by the slow growth in the Agriculture and allied sectors, the National Development Council (NDC), in its meeting held on 29th May, 2007 resolved that a special Additional Central Assistance Scheme (RKVY) be launched. The NDC resolved that agricultural development strategies must be reoriented to meet the needs of farmers and called upon the Central and State governments to evolve a strategy to rejuvenate agriculture. The NDC reaffirmed its commitment to achieve 4 per cent annual growth in the agricultural sector during the 11th plan.
The Department of Agriculture, in compliance of the above resolution and in consultation with the Planning Commission, has prepared the guidelines for the RKVY scheme, to be known as National Agriculture Development Programme (RKVY).

Objectives of the programme

To incentivize the states that increase their investment in Agriculture and allied sectors
To provide flexibility and autonomy to the States in planning and executing programmes for agriculture
To ensure the preparation of Agriculture Plans for the districts and states
To achieve the goal of reducing the yield gaps in important crops
To maximize returns to the farmers
To address the agriculture and allied sectors in an integrated manner

Basic features of RKVY

It is a State Plan scheme
The eligibility of a state for the RKVY is contingent upon the state maintaining or increasing the State Plan expenditure for Agricultural and Allied sectors
The base line expenditure is determined based on the average expenditure incurred by the State Government during the three years prior to the previous year.
The preparation of the district and State Agriculture Plans is mandatory
The scheme encourages convergence with other programmes such as NREGS.
The pattern of funding is 100% Central Government Grant.
If the state lowers its investment in the subsequent years, and goes out of the RKVY basket, then the balance resources for completing the projects already commenced would have to be committed by the states.
It is an incentive scheme, hence allocations are not automatic
It will integrate agriculture and allied sectors comprehensively
It will give high levels of flexibility to the states
Projects with definite time-lines are highly encouraged

List of allied sectors covered under the scheme

Crop Husbandry (including Horticulture)
Animal Husbandry, Dairy Development and Fisheries
Agricultural Research and Education
Agricultural Marketing
Food storage and Warehousing
Soil and Water Conservation
Agricultural Financial Institutions
Other Agriculture Programmes and Cooperation

Areas of focus under the RKVY

Integrated Development of Food crops, including coarse cereals, minor millets and pulses
Agriculture Mechanization
Soil Health and Productivity
Development of Rainfed Farming Systems
Integrated Pest Management
Promoting extension services
Horticulture
Animal Husbandry, Dairying & Fisheries
Sericulture
Study tours of farmers
Organic and Bio-fertilizers
Innovative Schemes

Integrated scheme of oilseeds, pulses, oilpalm and maize (ISOPOM)

The centrally sponsored ISOPOM (Integrated Scheme of Oilseeds, Pulses, Oil Palm, and Maize)4 1 have been under implementation during the Eleventh Plan in 14 states for oilseeds and pulses, 15 for maize, and 9 for oil palm. The pulses component has been merged with the NFSM with effect from April 1, 2010. Oilseeds are raised mostly under rainfed conditions and are important for the livelihood of small and marginal farmers in the arid and semi-arid areas of the country

National Horticulture Mission (NHM)

National Horticulture Mission is a centrally sponsored scheme launched by Government of India during the year 2005-06 (Tenth Plan). The goal of this scheme is to ensure holistic growth of horticulture sector in India and to enhance horticulture production.

The NHM's key objective

The NHM's key objective is to develop horticulture to the maximum potential available in the state and to augment production of all horticultural products (fruits, vegetables, flowers, plantation crops, spices, medicinal aromatic plants), except coconut as the ‘Coconut Development Board’ is implementing schemes for the development of coconut in the country. Other objectives of NHM include:
1. To enhance horticulture production, improve nutritional security and income support to farm households
2. To establish convergence and synergy among multiple on-going and planned programmes for horticulture development
3. To promote, develop and disseminate technologies, through a seamless blend of traditional wisdom and modern scientific knowledge
4. To create opportunities for employment generation for skilled and unskilled persons, especially unemployed youth

Coverage

All the States and Union Territories are covered under the Mission except the eight North Eastern States including Sikkim and the States of Jammu & Kashmir, Himachal Pradesh and Uttarakhand, which are covered under another Mission namely the Technology Mission for Integrated Development of Horticulture in the North Eastern States (TMNE). During XI plan, the assistance from Government of India will be 85% with 15% contribution by the State Government.

salient features

• The NHM is being implemented by the State Horticulture Mission of which the Mission Director is responsible for coordinating the programme. At the district level, the District level Committee is responsible for implementing the programme. The District Horticulture officer is the Member Secretary of the DLC, who may be contacted for availing the assistance.
• Assistance will be available for creating water sources under NHM. This assistance is available only to community based projects/ Panchayati Raj Institutions/ Farmer Groups.
• The Mission envisages a cluster approach for the holistic development of crop in the particular cluster. Hence the farmer is expected to get assistance for the main crop.
• Assistance for a number of components under NHM, particularly for the private sector involving infrastructure development such on nurseries, establishment of lab & clincs, post harvest management and marketing is in the form of credit linked back ended subsidy.
• Assistance is also available for activities like (a) Integrated mushroom unit for spawn, compost production and training (b) spawn making unit and (c) compost making unit. Assistance is also available for beekeeping activities like production of bee colonies by Bee Breeders, distribution of honey bee colonies, hives and bee keeping equipments.
• Under NHM Scheme, assistance is available for setting up primary / mobile processing unit costing upto Rs. 24.00 lakh. For bigger units, assistance is being provided by the Ministry of Food Processing Industries.

National Bamboo Mission (NBM)

Introduction

Bamboo is a versatile group of plants which is capable of providing ecological, economic and livelihood security to the people. Till recently, it has remained confined to the forests (12.8% of forest cover); two third of the growing stock located in the North-Eastern States. Importance of the crop as a source of raw material for industrial and domestic use with its growing demand all over the country necessitated its cultivation in farm lands as well.
With a view to harness the potential of bamboo crop, Department of Agriculture & Cooperation (DAC), Ministry of Agriculture is implementing a 100% Centrally Sponsored Scheme called Mission for Integrated Development of Horticulture (MIDH) in which National Bamboo Mission (NBM) is being implemented as a sub scheme.
The Mission envisages promoting holistic growth of bamboo sector by adopting area-based, regionally differentiated strategy and to increase the area under bamboo cultivation and marketing. Under the Mission, steps have been taken to increase the availability of quality planting material by supporting the setting up of new nurseries and strengthening of existing ones. To address forward integration, the Mission is taking steps to strengthen marketing of bamboo products, especially those of handicraft items.

Objectives of NBM

1> To promote the growth of the bamboo sector through as an area based regionally differentiated strategy;
2> To increase the coverage of area under bamboo in potential areas, with improved varieties to enhance yields;
3> To promote marketing of bamboo and bamboo based handicrafts;
4> To establish convergence and synergy among stake-holders for the development of bamboo;
5> To promote, develop and disseminate technologies through a seamless blend of traditional wisdom and modern scientific knowledge.
6> To generate employment opportunities for skilled and unskilled persons, especially unemployed youths.

Strategy of NBM

To achieve the above objectives, the Mission would adopt the following strategies:
1> Adopt a coordinated approach covering production and marketing to assure appropriate returns to growers/producers.
2> Promote Research and Development (R&D) of varieties and technologies for enhanced production.
3> Enhance acreage (in forest and non-forest areas) and productivity of bamboo through varietal change and improved agriculture practice.
4> Promote partnership, convergence and synergy among R&D and marketing agencies in public as well as private sectors, at all levels.
5> Promote where appropriate, cooperatives and self-help groups to ensure support and adequate returns to farmers.
6> To generate employment opportunities for skilled and unskilled persons, especially unemployed youths.
7> Set up National, State and sub-State level structures, to ensure adequate returns for the produce of the farmers and eliminate middlemen, to the extent possible

National Mission for Sustainable Agriculture (NMSA)

Sustaining agricultural productivity depends on quality and availability of natural resources like soil and water. Agricultural growth can be sustained by promoting conservation and sustainable use of these scarce natural resources through appropriate location specific measures. Indian agriculture remains predominantly rainfed covering about 60% of the country’s net sown area and accounts for 40% of the total food production. Thus, conservation of natural resources in conjunction with development of rainfed agriculture holds the key to meet burgeoning demands for foodgrain in the country. Towards this end, National Mission for Sustainable Agriculture (NMSA) has been formulated for enhancing agricultural productivity especially in rainfed areas focusing on integrated farming, water use efficiency, soil health management and synergizing resource conservation. NMSA derives its mandate from Sustainable Agriculture Mission which is one of the eight Missions outlined under National Action Plan on Climate Change (NAPCC).