Weekly Current Affairs: April week-2 - Market Intervention Scheme

  • Category
    Economy
  • Published
    15th Apr, 2020

Context

Amidst the lockdown, the Union government has asked all States / UTs asked to implement Market Intervention Scheme to ensure remunerative prices to farmers for perishable crops.

About

  • The Market Intervention Scheme (MIS) is an ad-hoc scheme under which are included horticultural commodities and other agricultural commodities which are perishable in nature and which are not covered under the minimum price support scheme.
  • It aims to intervene the market to protect the growers of their commodities from making distress sale in the event of a bumper crop during the peak arrival period when the prices tend to fall below economic levels and cost of production.
  • In order to protect the growers of these horticultural/agricultural commodities from making distress sale in the event of bumper crop during the peak arrival period when prices fall to very low level, Government implements M.I.S. for a particular commodity on the request of a State Government concerned.
  • Losses suffered are shared on 50:50 basis between Central Government and the State.
  • Market Intervention Scheme works in a similar fashion to Minimum Support Price based procurement mechanism for food grains.

    Minimum Support Price (MSP):

    • Minimum support price (MSP) is one of the instruments of Agricultural Price Policy (APP).
    • APP basically means government intervention to influence agricultural productivity and/or farm input prices.
    • The kind and degree of intervention (or the policy instruments and their objectives) vary with the stage of agricultural development. 
    • The basic intent of announcing MSP before the sowing season is to help farmers take sowing decision keeping in mind that if they are not able to get a reasonable price by selling in the market, at least they will be able to get the MSP.
    • In that sense, MSP is an assured or guaranteed price (insured price).

    Other progress:

    • The Government has decided that start date of procurement of pulses and oilseeds under the Price Support Scheme (PSS) may be decided by the respective States. The procurement shall continue for 90 days from the date of commencement of procurement.
    • Under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) Scheme during the lockdown period, about 7.92 crore farmer families have been benefitted and an amount of Rs. 15,841 crore has been released so far.
    • Advisory issued to State Governments/ UT on 4th April 2020 to facilitate Direct Marketing, enabling direct purchase from the farmers/ FPOs/ Cooperatives etc. by Bulk Buyers/Big Retailers/Processors by limiting regulation under State APMC Act.
    • Several States like Tamil Nadu, Karnataka and Jharkhand have already initiated action on lines of issued advisory.
    • Logistics module had been added in the e-NAM App earlier. This module is being used by farmers / traders and already more than 200 people have started using it.

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