PM-AASHA: Strengthening Farmers’ Income Security Through Price Support Mechanisms

Policy Update

CB Kavin Adithya

Introduction

Agriculture has always been an important part of India’s economy and society. Even today, millions of people living in villages depend on farming for their livelihood. In many families, agriculture is not just a profession but a way of life that has been followed for generations. However, farming is not always easy. Farmers face many problems such as unpredictable weather, rising costs of seeds and fertilizers, pest attacks, and most importantly, fluctuating market prices.

Imagine spending months growing a crop, investing money and hard work, and then finding out that the market price has dropped when it is time to sell. This is a reality faced by many farmers across India. Such situations often force them to sell their produce at low prices, leading to financial stress and uncertainty.

To address these issues, the Government of India launched the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) in September 2018. The scheme was introduced to strengthen the Minimum Support Price (MSP) system and provide farmers with better price assurance.PM-AASHA represents an important policy intervention aimed at strengthening the MSP framework, protecting farmers from sudden price fluctuations, and enhancing income security through effective procurement and price support mechanisms.

Functioning: 

India’s agriculture sector supports a large section of the population, but it still faces many challenges. Although nearly half of the workforce is involved in agriculture, the sector contributes less than one-fifth of the country’s GDP. This shows that many farmers earn relatively low incomes despite their hard work. Several factors contribute to this situation.

 Landholdings are often small and fragmented, making it difficult to achieve high productivity. Many farmers still depend on monsoon rains, and access to modern technology and quality inputs remains limited in some areas. Storage facilities and transportation infrastructure are also inadequate in many regions. Because of these problems, farmers frequently struggle to get fair prices for their produce. I think this is one of the biggest concerns in Indian agriculture. When prices fall sharply after harvest, farmers have little bargaining power and are often forced to sell immediately to meet their financial needs. AASHA was introduced to tackle these challenges by providing better price support and reducing the risks associated with market fluctuations. 

How PM-AASHA Works

 The main objective of PM-AASHA is to ensure that farmers receive fair and remunerative prices for their crops. It seeks to strengthen the MSP system and prevent distress sales.

The scheme operates through four major components:

• Price Support Scheme (PSS)Under this component, government agencies such as NAFED and NCCF directly purchase crops like pulses, oilseeds, and copra whenever market prices fall below MSP. This guarantees farmers a minimum price for their produce.  For example, if a farmer grows tur dal and the market price drops below the MSP, government agencies can procure the crop directly. This helps the farmer avoid losses.
• Price Deficiency Payment Scheme (PDPS)Instead of physically buying the produce, the government pays farmers the difference between the MSP and the market price. Farmers can sell their crops in the open market while still receiving compensation for lower prices.This system can reduce storage and procurement costs while still protecting farmers’ incomes.

• Private Procurement and Stockist Scheme (PPSS)Under this scheme, private agencies are allowed to participate in procurement activities under government supervision. The idea is to increase procurement capacity and involve the private sector in supporting farmers.
• Market Intervention Scheme (MIS)This component mainly covers perishable commodities such as fruits and vegetables. When there is excess production and prices crash, the government intervenes to stabilize the market and protect farmers from heavy losses.

Together, these components aim to create a more reliable. and farmer-friendly marketing system. 

Figure 1: Budget Allocation and Utilisation of the Ministry of Agriculture and Farmers Welfare (2019–2026)

 Source: Ministry of Agriculture and Farmers Welfare Annual Reports.

Figure 1 illustrates that the Ministry of Agriculture and Farmers Welfare has consistently utilised a significant proportion of its allocated budget over the years. High utilisation rates indicate the government’s sustained commitment towards agricultural development and farmer welfare. However, effective outcomes depend not only on financial allocations but also on the efficient implementation of schemes. PM-AASHA benefits from such budgetary support by enabling procurement operations, market interventions, and price stabilisation measures.

Performance of PM-AASHA

Since its launch, PM-AASHA has shown some encouraging results. Procurement of pulses and oilseeds has increased in several states, especially during years when market prices fell below MSP. Agencies like NAFED and NCCF have played an important role in ensuring that farmers receive better returns.

The government has also extended the scheme up to 2025–26 with a substantial financial allocation.In October 2024, the Union Cabinet approved the continuation of PM-AASHA until 2025–26 with enhanced financial support. This decision reflects the government’s commitment to strengthening MSP-based procurement and ensuring better income security for farmers. The extension also aims to improve domestic production of pulses and oilseeds while reducing dependence on imports.

 This shows continued commitment toward improving farmers’ income security. One positive outcome has been the support provided to pulse production. To reduce dependence on imports, the government announced 100 percent procurement of certain pulses such as Tur, Urad, and Masoor. This gave farmers greater confidence to cultivate these crops because they knew there would be a guaranteed buyer.

However, the benefits have not been evenly distributed across all states. States like Madhya Pradesh, Maharashtra, and Karnataka have gained more because they produce larger quantities of pulses and oilseeds. In Tamil Nadu, the impact has been comparatively limited due to the state’s focus on crops such as paddy, sugarcane, and horticultural products.

Table 1: Institutional and Administrative Framework Supporting PM-AASHA

Source: Compiled from Ministry of Agriculture and Farmers Welfare, NAFED, NCCF, and related policy documents.

Analysis of Institutional Framework

The institutional framework of PM-AASHA demonstrates a coordinated approach involving multiple ministries, procurement agencies, legislative provisions, and supporting schemes. Organisations such as NAFED, NCCF, and state governments play a crucial role in ensuring procurement and market intervention activities. While this multi-agency structure enhances implementation capacity, it may also create coordination challenges and administrative delays. Therefore, effective cooperation among stakeholders remains essential for achieving the scheme’s objectives.

Impact of PM-AASHA: 

Impact on Farmers and Agriculture

One of the biggest achievements of PM-AASHA is its role in reducing distress sales. Farmers often panic when prices fall and sell their produce quickly to avoid further losses. With procurement support and price assurance, many farmers can now expect more stable returns. The scheme has also encouraged crop diversification. Traditionally, many farmers preferred crops like wheat and paddy because they had stronger procurement systems. PM-AASHA has encouraged farmers to grow pulses and oilseeds by providing price support for these crops.

Crop diversification contributes to sustainable agricultural development by improving soil health, reducing resource pressure, and increasing resilience against market and climatic risks. PM-AASHA supports this objective by encouraging the cultivation of pulses and oilseeds through price assurance mechanisms.

Challenges and Emerging Issues

Despite its achievements, PM-AASHA still faces several challenges. 

• One major issue is limited crop coverage. The scheme mainly focuses on pulses, oilseeds, and copra. Many other crops do not receive similar support, leaving several farmers outside its benefits.
• Infrastructure is another concern. Procurement centres are not available everywhere, and storage facilities are often inadequate. Farmers in remote areas may have to travel long distances to sell their produce.
• Awareness is also a problem. Many small and marginal farmers do not fully understand the scheme or the procedures involved in registration and procurement.
•  Another challenge is the uneven implementation across states. While some states actively participate, others have shown limited adoption, especially of the Price Deficiency Payment Scheme.
• Fiscal sustainability remains a challenge because large-scale procurement and price support operations require significant public expenditure. Ensuring long-term financial viability while maintaining effective farmer support is essential.

I think that a good scheme can only be successful if farmers are able to access it easily. If the benefits remain concentrated in a few regions, the overall impact will be limited.

 Way Forward

To make PM-AASHA more effective, several improvements can be considered.

• First, the scheme should be expanded to cover more crops based on regional agricultural patterns. This would allow more farmers to benefit from price support.
• Second, investment in storage facilities, warehouses, and procurement infrastructure should be increased. Better infrastructure can make procurement faster and more efficient.
• Third, digital systems can simplify farmer registration and payment processes. Faster payments will increase farmers’ trust in the scheme.

Awareness campaigns should also be strengthened through agricultural extension services, Farmer Producer Organisations (FPOs), and local institutions. Farmers need clear information about how to access the benefits available to them.Finally, stronger coordination between the central and state governments can improve implementation and ensure that benefits reach farmers on time.

Policy Recommendations

• Expand coverage to include region-specific crops.

• Strengthen procurement centres in remote areas.

• Improve digital registration and payment systems.

• Increase farmer awareness through FPOs and extension services.

• Enhance Centre-State coordination for effective implementation.

REFERENCE:

 Government Sources: Ministry of Agriculture & Farmers Welfare (2018), Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA): Umbrella Scheme for MSP Assurance, Government of India.pib.gov.in.Department of Agriculture & Farmers Welfare (2024), Minimum Support Price (MSP) and Procurement Policy Framework, Government of India.agricoop.gov.in⁠.Ministry of Agriculture & Farmers Welfare (2023), Procurement Operations under PSS and PDPS Schemes, Government of India.agricoop.gov.in

Procurement Agencies:  National Agricultural Cooperative Marketing Federation of India (NAFED) (2024), Procurement of Pulses and Oilseeds under Price Support Scheme (PSS).nafed-india.com

National Cooperative Consumers’ Federation of India (NCCF) (2024), Market Intervention and Procurement Activities.nccf-india.com

Policy Reports / Secondary Sources;Press Information Bureau (PIB) (2018), Government launches PM-AASHA to ensure remunerative prices for farmers.pib.gov.in.NITI Aayog (2019), Strategy for Doubling Farmers’ Income, Government of India.niti.gov.in. ThePrint (2024), PM-AASHA: Strengthening Farmers’ Income Security through MSP Mechanisms.theprint.in

About the Contributor:

Kavin Adithya C.B. is an IMPRI Intern and a postgraduate student pursuing M.A. International Relations at Loyola College, Chennai. His areas of interest include International Relations, International Political Economy, Public Policy, Geopolitics, Defence Studies, and Human Rights. He is particularly interested in analysing public policies and their socio-economic impact.

Acknowledgement:

 I express my sincere gratitude to IMPRI (Impact and Policy Research Institute) for providing the opportunity to undertake this policy analysis. I also acknowledge the valuable insights obtained from government reports, policy documents, official websites, and secondary sources that contributed to the completion of this study. Their support and resources greatly assisted in understanding and evaluating Mission LiFE within India’s green development agenda.

Disclaimer

This article is intended for academic and informational purposes only. The views expressed are those of the author and do not necessarily reflect the views of IMPRI or any government institution.

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