Centre coming up with Rs 500-cr fund to compensate farmers in this budget

New Delhi: Amidst intense speculation on what the general budget of 2018-19 will hold for the agriculture sector, the Modi Government is working on creating a Central Corpus Fund of Rs 500-crore for extending interest-free working capital advance to state governments to enable them to participate in its proposed ``Market Assurance Scheme'.States will create a Revolving Fund at their level after matching the advance availed from the corpus fund, to come to the aid of farmers who are forced to sell their produce below the notified minimum support price (MSP). Lack of remunerative prices to farmers for their produce is one of the reasons for the agrarian crisis in the country.

Under the proposed ``Market Assurance Scheme', the Centre will compensate states up to 40 per cent of the MSP value for any losses incurred by them based on actual procurement, says the revised proposal procured by the UNI.In the case of North-East and Himalayan States, this compensation threshold will be raised to up to 50 per cent.

The scheme, drawn in consultation with state governments, is meant to prevent distress sales of farm produce by farmers. It provides for assured market to farmers as state government will step in to procure the notified produce at the minimum support price in case prices dip below the price fixed by the government. 

The central government notifies MSP for 23 crops. But last year, for instance, only 33 per cent of total production of wheat and rice, eight per cent of pulses and only one per cent of oilseeds were procured at MSP from farmers.

Under the proposed scheme, States shall be free to notify the crops (except wheat and rice that are procured by the central government) to be procured through government agencies. State governments will decide the quantity to be procured and also the manner of disbursal which could be through the Public Distribution System or under Open Market Sale Scheme (OMSS). Farmers will get the benefit of speedy and timely market intervention by the government. 

As of now, the Ministry of Agriculture operates a Price Support Scheme which has mostly been confined to purchase pulses and oilseeds when prices have dipped. But the new ``Market Assurance Scheme' will cover all the produce notified by a state government for which minimum support price is announced. The decision-making and implementation will be in the hands of state governments for speedy redress.(UNI)