Policy Update
Rashmi Kumari
Introduction
The Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA), initiated by the Government of India in September 2018, aims to provide reasonable assurance that farmers can obtain the minimum support price (MSP) for their crops through adequate mechanisms for procurement and price support. Farmers have grown accustomed to announcements of MSP, but many were unable to realise the support price that the MSP (particularly for pulses and oilseeds) implied due to weak procurement systems, limited access to markets, and farm-gate price fluctuations.
The PM-AASHA project has aimed to fill this void by bringing different support mechanisms together into a single program with physical procurement, price deficiency payments, and market intervention schemes. The action plan that has been developed to implement PM-AASHA has the intention of operationalising the MSP, lessening distress for farmers, and stabilising agricultural incomes. The PM-AASHA program complements existing price policies while working toward the government’s broader objectives for doubling farmers’ income and improving food security. PM-AASHA should be considered a shift away from simply announcing support prices for crops to a program that provides price assurance, making PM-AASHA a significant reform in agricultural policy in India.
Image source: https://www.india.gov.in/spotlight/pradhan-mantri-annadata-aay-sanrakshan-abhiyan-pm-aasha
Scheme Architecture & Functioning
PM‑AASHA combines and expands several earlier schemes under a unified framework administered by the Ministry of Agriculture & Farmers’ Welfare through central nodal agencies like NAFED and NCCF, in collaboration with State Governments. The scheme has four core components:
- Price Support Scheme (PSS)
Physical procurement at MSP of fair-quality pulses, oilseeds, and copra by NAFED/FCI with state support. The Centre bears the procurement cost and potential losses. From 2024‑25, procurement aims are set at 25 % of the national production of eligible crops; however, for Tur (Arhar), Urad, and Masur, the government has guaranteed 100 % procurement for the season—a four-year commitment to boost pulses production. A government guarantee of ₹45,000 crore backs procurement operations.
- Price Stabilisation Fund (PSF)
The fund provides working capital to buffer stocks of essential items (e.g., pulses and onions), and enables procurement during price spikes. It supports retail interventions and subsidies under Bharat Dal, Atta, and Rice.
- Price Deficiency Payment Scheme (PDPS)
Rather than physical buying, the central government pays farmers the difference between MSP and the actual selling/modal price of oilseeds. This applies to pre-registered farmers selling up to 40 % of their produce during a designated window. Central assistance covers up to 15 % of MSP.
- Market Intervention Scheme (MIS)
Covers perishable horticultural crops (e.g., tomatoes, onions, potatoes). The government covers up to 25 % of production when prices fall sharply. Benefits include direct payments and subsidisation of storage/transportation.
- Pilot Private Procurement & Stockist Scheme (PPPS)
A pilot mechanism enabling private players to procure oilseeds at MSP in select APMCs to complement PSS or PDPS.
States are free to choose between PSS or PDPS for oilseeds in a given season; both mechanisms are not deployed simultaneously for the same commodity at the state level.
Performance & Achievements
- Extension & Budget Allocation
The Union Cabinet has approved the extension of PM‑AASHA through 2025‑26, under the 15th Finance Commission cycle, with an outlay of ₹35,000 crore.
Additional procurement support: government guarantee enhanced from ₹16,000 crore to ₹45,000 crore.
- Guaranteed MSP & Procurement Statistics
The government pledged 100 % procurement of Tur, Urad, and Masur for the 2024‑25 season.
Target: 13.22 lakh metric tonnes (LMT) of Tur across nine major states (AP, Chhattisgarh, Gujarat, Haryana, Karnataka, MP, Maharashtra, Telangana, UP).
As of mid-February 2025, about 0.15 LMT of Tur has been procured, directly benefiting 12,006 farmers in select states.
- Strengthened Support Mechanisms
PDPS coverage has expanded to 40 % of oilseeds production for up to four months; the government covers up to 15 % MSP price differential.
MIS support has increased to 25 % of production, including new direct payment options and reimbursement for storage/transport.
PSF now also includes buffer stocking of onions and pulses to dampen market volatility.
Impact on Farmers & Markets
- Support to farmers: Announcement-based price assurances and market interventions have significantly helped farmers avoid distress sales, particularly in the pulses and oilseeds markets.
- Boosting pulses output: The 100% MSP procurement on key pulses has incentivised farmers to diversify into these crops and enhance domestic production, thereby lowering import dependency.
- Market stabilisation: Buffer stocking and MIS interventions have reduced price volatility in essential commodities, benefiting both producers and consumers.
- Enhanced transparency and ease of payment: Pre-registered farmers receiving direct payments through e‑portals like eSamridhi (NAFED) and eSamyukti (NCCF) ensure timely, leak-proof transfers.
- Financial inclusion: The guarantee fund, boosting bank credit lines to nodal agencies, has expanded cash support capacity and deepened procurement operations.
Challenges
- Limited procurement reach: Though physical procurement is enabled, actual MSP realisation remains low for many crops. Earlier data showed that only about 3 % of pulses were procured under PM‑AASHA in 2019. Weak mandi infrastructure and capacity constraints affect reach.
- Awareness gaps: Surveys by NSSO and others revealed that only 24 % of farming households are aware of MSP for their crops
- Logistical gaps: Physical procurement, warehousing, and transportation capacities—especially in remote areas—remain limited, creating challenges for scheme outreach.
- Limited private participation: The PPPS pilot is still in nascent stages; significant scaling of the private role has not yet occurred.
Way Forward
- Upgrade mandi infrastructure: Strengthen rural procurement infrastructure—expand warehousing, improve access, and engage more state-agency hubs.
- Enhance awareness campaigns: States must actively educate farmers on MSP, PM‑AASHA benefits, and enrolment procedures—leveraging extension services, local media, and helplines.
- Scale MIS & buffer operations: Broader coverage and proactive disbursement across more states/commodities beyond pulses would further stabilise prices.
- Deepen digital integration: Ensure end-to-end digital tracking—from registration to payment—via eSamridhi/eSamyukti platforms, enabling better monitoring and reducing delays.
- Expand private procurement pilots: Encourage larger and transparent private-sector involvement under PPPS with proper regulatory oversight to improve competition and market efficiency.
- Periodic monitoring & review: Central & state governments should jointly monitor quarterly KPIs—procurement volumes, farmer reach, payment timelines, digital adoption—and publish public dashboards for accountability.
- Strengthen linkages with allied schemes: Deeper integration with MSP policies, crop insurance (PMFBY), irrigation (PMKSY), and soil health programs will enhance farmer resilience and sustainability.
Conclusion
PM‑AASHA represents a significant change in the MSP procedure in India: it will not only announce prices, but also provide a “price” assurance. The expansion of the initiative into longer durations, longer financing periods, and price assurance to directly procure the lowest price pulses and oilseeds is an advance to benefit farmers and stabilise the marketplace.
While there were achievements to date: the ₹45,000 crore guarantee against a request to procure stock, the comprehension able assurance of MSP for 100% of the pulses to demonstrate the resilience of the whole system functioning (100%), developed PSF/PDPS systems to benefit farmers (MSP schemes), there were hindrances with visibility, notice-ability, availability, education, etc.
To show the complete potential of the program will require stronger mandi systems, education of farmers around these types of agricultural systems, better digital literacy amongst farmers, and full reliance on mobilisation (and ownership) of private sector participation. By effectively managing coordination from the Central Government with the State-level initiatives and the set of local initiatives, there is ample potential for PM-AASHA to significantly enhance/stabilise farm incomes while providing assured and remunerative pricing and in the direction of doubling farmers’ income over the next few seasons.
References:
About the contributor: Rashmi Kumari is a Research Intern at IMPRI and a Master’s student in Economics at Gokhale Institute of Politics and Economics, Pune.
Acknowledgement: The author extends her sincere gratitude to the IMPRI team and Ms. Aasthaba Jadeja for her invaluable guidance throughout the process.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.
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