FPC - Corporate Partnership will be helpful for assuring MSP to oilseeds under PPSS

YOGESH THORAT 
Pradhanmantri Annadata Aay Suraksha Abhiyan (PMAASHA) announced by cabinet of the GOI, as a umbrella scheme for assuring MSP to the farmers. This scheme has been made as a combo pack of regular scheme of support prices and pilots conducted by some states as well  pilots to be conducted. It basically comprises of three sub  schemes called Price Support Scheme (PSS), Price Deficiency Payment Scheme (PDP) and Pilot on Private Procurement and Stockist Scheme (PPSS).

In the present  turbulence of  macroeconomy, primary sector should be safeguarded through proper measures to avoid further damage to the agrarian economy. As per the latest reports of the CSO, Agri GDP has been sliding since the beginning of 2018-19. Therefore, over the period of time, Central government need to focus on the stabilising agriculture markets through various market intervention schemes. The key interventions include implementation of the Price Support Scheme effectively through physical procurement of the commodities. Already Kharif Marketing Season 2019-20 has been started and central Nodal agency NAFED has been geared up for procurement of Pulses & oilseeds. Based on outstanding performance in procurement operations since last three years; NAFED has gone through tremendous changes in their own administrative reforms, innovation in procurement channels & digitalisation of Procurement System. All these efforts has lead to improve the efficiency of the physical procurement system and benefitted particularly pulses farmers as well as helped to check the food inflation. 

However, it has been seen that physical procurement model is quite successful for the food grains like wheat, rice and pulses due to its disposal mechanism through PDS or various government schemes. Even since pulses are out of the purview of the NFSM, Disposal of it faced some challenges and it may have caused losses to the exchequer. Therefore, NITI Ayog came with the idea of PPSS as a advanced version of PDP (Bhavanter) Scheme implemented in Madhya Pradesh & Maharashtra as an innovation for assuring MSP to Oilseed producers. GOI has declared to conduct 8 pilots of PPSS across the country and guidelines has been issued for the same. But private agencies like processors, oil manufactures and traders have not shown the interest to come forward to join hands for national interest. Unless and until private sector is not looking towards  PMAASHA as an opportunity to redefine their procurement models; success of the Pilot is nightmare.

Private Procurement and Stockist Scheme (PPSS) is framed to increase the participation of the private sector. Prima facie, Government is eyeing to reduce the burden on the exchequer and abstain from  disposal mechanism of procured commodities. However, hasty decision of fixed service charge driven model with some incentives does not seems lucrative for the private sector due to dissonant between value chain stakeholders and policy makers. In Maharashtra, decree of ‘not to trade below MSP at APMC’ did not work. Thus, assuring MSP by decree or mere incentive model does not have sustainability unless and until it is linked to Market driven institutional  model. 

As soybean is internationally traded commodity; it has high influence of geopolitical and climatical factors. This commodity is successfully traded through future trading platforms. Therefore, idea of maximum 15 % service charge including 1% administrative cost and mandatory storage period of 90 days doesn’t fit into present procurement models of private sector. Since, assurance of of lowest quoted service charge model linked to MSP irrespective of procurement or disposal rates gives dissenting voices from industry.

This should have keep the integrated public private partnership approach for the implementation. Procurement operations should be handled by farmer producer organisations and disposal should be arranged by solvent extraction plants, oil manufactures. This approach will help to strengthen the idea of market reform along with strengthening of FPOs.  Disposal of the PPSS Pilot  need to be linked to future trading, electronic spot markets or eNAM otherwise it will again government sponsored hoarding & speculation model and may have impact on allied industry like poultry. Thus PPSS should be combination of PDP linked to market rates and statistical formulae of service Charge. 

Finally, as India  is net importer of oilseeds henceforth, self sufficiency in oilseeds  is prime for food security. On this background interventions through PPSS is synergy partnership approach between Government & Private sector to bring yellow revolution through MSP assurance to the farmers.

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