Govt Mulls Rs 15,000 Crore Scheme to Give Promised MSP to Farmers

New Delhi: In a bid to protect farmers' interest, the government may soon unveil a Rs 15,000 crore plan to ensure they get the minimum support price (MSP) for their crops even when market prices fall below the benchmark rate, sources said.

In his Budget 2018 speech, Finance Minister Arun Jaitley had announced that the government has decided to fix MSP for kharif (summer sown) at least at one and half times of their production cost.

Jaitley had also said that the Niti Aayog in consultation with central and state governments will put in place a foolproof mechanism to ensure farmers get benefit of MSP.

According to sources, Niti Aayog will soon call a meeting of central and state governments to discuss this issue and find suitable mechanism to compensate farmers and ensure MSP.

There could be one or more model that could be implemented across all the States and Union Territories, they added.

In the meeting, the scheme already adopted by Madhya Pradesh and Telangana governments would be discussed. While Madhya Pradesh is paying farmers the difference between the MSP and the market price, Telangana government has announced fixed amount to farmers on per acre of land.

Sources said the new mechanism is expected to be in place within next six months before the Kharif harvest that starts from September.

The Centre might have to bear Rs 12,000-15,000 crore annually to compensate farmers, sources said.

Yesterday, Agriculture Secretary S K Pattanayak said: "We will call a meeting of state governments early next month to discuss a mechanism so that farmers get MSP."

The Centre is open to all suggestions from stakeholders, he had said.

The food ministry procures wheat and paddy through Food Corporation of India (FCI) and state agencies at the MSP.

That apart, the agriculture ministry runs a Price Support Scheme (PSS) under which the procurement of oil seeds, pulses and cotton through central nodal agencies at the MSP.

The Centre also implements Market Intervention Scheme (MIS) for procurement of agricultural and horticultural commodities which are perishable in nature and are not covered under the Price Support Scheme (PSS).