NEW DELHI: Entrusted with the task of figuring out how farmers would get the promised minimum support prices (MSP) for their produce, Niti Aayog is still clueless about the implementation model — its initial proposal to hire private sector firms for procurement has been shot down by the Prime Minister’s Economic Advisory Council (PMEAC).
“In the last meeting, Niti Aayog had suggested that the government should engage private players for procurement at MSP in lieu of commission. However, we do not think this is a good model at all. The government is committed to improve farm income and that is why they (Niti Aayog) have been asked to rework it,” said a senior member of PMEAC.
Despite much deliberation, the agency had not been able to propose an apt model, suggesting that the hiring of private players for procurement offered ‘great promise’. But, the idea did not find support in the PMEAC as they felt the model will encourage middlemen rather than improving income of farmers.
“The main purpose of the whole exercise was to remove the middlemen and to ensure that the benefit of raised MSP reaches farmer, however, this will not happen by engaging private players by offering commission.”
Another reason for rejecting the idea was that the government had involved private players in procurement earlier too, but the results were not very encouraging.
“By hiring private players for commission, the government had to either spend more money or cut benefits to farmer. Also, while the model can be extended to paddy and wheat, it will be challenging for other commodities like pulses or oilseeds,” the member added.According to sources, NITI Aayog will now need to come up with a new and revised procurement model which is “viable and can be practically implemented” by the end of the month.
Jaitley's budget promise to farmers...
In this year’s Union Budget, Finance Minister Arun Jaitley announced that Minimum Support Prices will be announced at 50 per cent over the cost of production of crops incurred by the farmers.
“As per pre-determined principle, the government has decided to keep MSP for the all unannounced crops of kharif at least at one and half times of their production cost,” he had said.
Niti Aayog had been entrusted with figuring out a procurement system which would implement the government's plan.