PRICE
DEFICIENCY PAYMENT SCHEME - AGRICULTURE
News:
Price deficiency payments
prone to manipulation by traders, says Ashok Gulati
What's
in the news?
●
The group of ministers finalised on the
market assurance scheme and the price deficiency payment scheme, as the two
methods, by which it will be operationalised.
Key
takeaways:
●
Price deficiency scheme was experimented
in Madhya Pradesh – Bhavantar Bhugtan
Yojana – but it was abruptly called off for the rabi season, because the
results from the kharif season, showed that literally it is impossible to reach
sufficient number of farmers.
Price
Deficiency Payment:
●
The Price Deficiency Payment (PDP) Scheme
is a scheme suggested by the Niti Aayog
of the Central Government.
Objective:
●
Its main idea is that the farmers must be
compensated with the amount that is the
difference between the market price of the crop and the Minimum Support Price (MSP),
as finalized by the Central Government and the respective state governments.
Beneficiaries
of Scheme:
●
The farmers
will need to get themselves registered with the APMC Mandi, in order to get the
benefits.
●
The farmers who are registered with the
APMC Mandi and are involved in the farming of crops other than rice and wheat
shall be the actual beneficiaries of the scheme.
●
They will have to report the area that
they have sown, in order to claim the compensation.
Major
Exclusions from Scheme:
●
The farmers
involved in the farming of rice and wheat will not be entitled to reap the
benefits of the compensation, in case of any loss in money because of their
harvested crop.
●
The functioning of the Minimum Support
Price (MSP) will continue to exist for all these types of farmers.
Features
of Price Deficiency Payment Scheme:
●
Price
Cap
- There will be a cap of a maximum of 10% difference between the MSP and the
Market Price, which will be provided by the Central Government. The amount,
which will be the difference between the two, will be transferred to the bank
account of the beneficiary farmer, through the DBT (Direct Benefit Transfer)
process directly to the Aadhar-linked bank account of the farmer.
●
Subsidy
Bill
- The Central Government has been accumulating large stocks of grains and the
harvest with it in the various godowns across the country, more than the buffer
requirements.
●
The scheme will be targeting the reduction
in the costs due to the storage and transportation of the harvested crops in
the godowns of the Government.
●
It is a scheme where the Government will
pay off the extra amount, in the form of cash, that has been a kind of
unnecessary baggage for the farmers, who wish to sell their harvest to the
market.