Niti Aayog may replace MSP with payment system to benefit farmers

In a move to benefit farmers more, the government is planning to set up price deficiency payment system instead of MSP (Minimum Support Price), a source informed Zee Business.

As per the source, NITI Aayog (National Institution for Transforming India), will be setting up the system.

Under the new system, for any commodity, the government will decide the average price for three years. The farmers will then, register the quantity of the crop at the market. The difference in amount based on the current market rate will be given to the farmers, said the source. 

At the first stage, NITI Aayog will begin the system as 'pilot project' at two locations only and on Cotton commodity.

As per the source, later on, the system likely to be applicable on pulses and other commodities. To check the process, the pilot project may be undertaken at different commodities separately.

Apart from Transforming India report by NITI Aayog, tThe National Sample Survey Organisation in its report mentioned that the farmers are not getting benefits under MSP. 

In June, the government had increased the MSP of pulses by Rs 425 to Rs 5,000-5,225 per quintal for the 2016-17 Kharif season. 

The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi, gave its approval for the hike in the MSPs for all Kharif crops of the 2016-17 season.

But, with the constant increase in pulse prices, in July, the central government decided to set up a committee to relook at the MSP and bonus to promote pulse cultivation. 

The decision was taken in a high-powered ministerial meeting headed by Finance Minister Arun Jaitley, which was attended by Food Minister Ram Vilas Paswan and Urban Development Minister M Venkaiah Naidu.