The government on Wednesday asked states to rope in private players to ensure minimum support price (MSP) to farmers, after the union cabinet approved a new procurement policy.
In an exclusive interview to CNBC-TV18's Manisha Gupta, Shobhana K Patnaik, union agriculture secretary, said, “The government believes in encouraging the private sector to come in a very big way into the areas of giving fair and remunerative prices to the farmers.”
Patnaik also asked private players to come forward to procure, stock and do value additions to oilseeds and sell it at right appropriate price to the consumers.
According to Patnaik, the government will give administrative cost support up to 15 percent to farmers if it's justifiable.
In the budget this year, the government had announced that it will put in place a fool-proof mechanism to ensure MSP to farmers. It had asked think-tank Niti Aayog to suggest a mechanism in consultation with the union agriculture ministry and states.
According to the sources, the agriculture ministry's proposal on new procurement policy 'Annadata Maulya Samrakshana Yojana' was taken up for discussion in the cabinet, and the same has been approved.
Under the new policy, the state governments will be given an option to choose multiple schemes to protect farmers when prices fall below the MSP.
A new scheme 'Price Deficiency Payment (PDP)' has been framed on the lines of Madhya Pradesh government's Bhavantar Bhugtan Yojana (BBY) to protect oilseeds farmers only.
Under the PDP, the government will pay to farmers the difference between the MSP and monthly average price of oilseeds quoted in wholesale market. This would be implemented for up to 25 per cent of the oilseeds production in a state.
Besides this, the states are given option to rope in private players for oilseeds procurement on a pilot basis.
Both PDP and private players' participation will be exclusively for oilseeds because the government wants to bring down the country's import dependence on cooking oils, the sources said.
Under the new policy, the states will also have an option to choose the existing Price Support Scheme (PSS), under which central agencies procure commodities covered under the MSP policy when prices fall below the MSP.
(With inputs from PTI)