The Indian government is continuously exploring innovative approaches to support its farmers and ensure fair prices for their produce. The Private Procurement & Stockist Scheme (PPSS), a pilot initiative under the Pradhan Mantri – Annadata Aay Sanrakshan Abhiyan (PM-AASHA), is designed to assess the viability of private sector participation in Minimum Support Price (MSP) operations for oilseeds. This piece provides an overview of the scheme’s objectives, preconditions, and implementation process.
Objective of the PPSS
The primary objective of the PPSS is to evaluate the effectiveness of private agencies in procurement operations at MSP. Traditionally, MSP procurement has been the domain of public sector and cooperative agencies. The PPSS aims to:
-
Assess the workability of private agencies in MSP procurement.
-
Tap into private sector expertise and efficiencies.
-
Serve farmers’ welfare without additional burden on the government.
-
Create demand and influence the market positively, especially in surplus regions.
-
Promote warehouses and processing mills for value addition.
Background of the PPSS
The Government of India, under the PM-AASHA umbrella scheme, offers states/UTs a choice between the Price Deficiency Payment Scheme (PDPS) and the Price Support Scheme (PSS) for oilseeds. The PPSS is an additional option, a pilot initiative, to assess private sector involvement.
-
Under PM-AASHA, procurement of pulses and copra is done under the PSS.
-
For oilseeds, states/UTs can choose between PDPS and PSS.
-
States/UTs also have the option to roll out a pilot of PPSS in selected districts/APMCs.
-
The PPSS pilot will be implemented by the Department of Agriculture, Cooperation & Farmers Welfare.
-
Oilseeds covered under PPSS include groundnut, soybean, sunflower, sesamum, niger seed, rapeseed/mustard seed, safflower, and toria.
Preconditions for Implementing the Pilot PPSS
Several preconditions must be met for the implementation of the pilot PPSS:
-
Farmer Registration: Farmers must register on a dedicated portal within a stipulated time.
-
Portal Integration: Registration data should be integrated with other government procurement schemes.
-
APLM Act: States/UTs must adopt the Model “Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017” or commit to do so within a specified time frame.
-
FAQ Procurement: Procurement is limited to Fair Average Quality (FAQ) products at MSP.
-
Procurement Limit: Private agencies can procure up to 25% of the district’s production when market prices fall below the MSP.
Coverage of the PPSS
The pilot scheme of PPSS has specific coverage parameters:
-
First Come First Serve: Proposals from states are considered on a “First Come First Serve” basis.
-
Limited Pilots: Only 8 pilot projects will be approved by DAC&FW.
-
Applicable Oilseeds: The pilot PPSS is applicable for oilseeds produced in selected districts where the state has opted for procurement at MSP by an empanelled private agency.
-
State/UT Choice: The implementing state/UT chooses the oilseeds for which the pilot PPSS is proposed.
-
Online Registration: Online registration for farmers is during a predefined period, preferably before the arrival of the crop in the market.
-
Implementation Period: The scheme will be implemented for a period of 90 days.
-
Simultaneous Implementation: PPSS may be implemented simultaneously with PSS/PDPS in selected districts/APMCs to ensure farmers can avail the benefits of normal procurement windows.
Selection of Private Agencies
The selection of private agencies for the pilot PPSS involves:
-
Track Record: Selection based on track record, corporate governance, and management of agricultural produce.
-
Transparent Tendering: Private agencies are empanelled through a transparent tendering process.
-
Service Charges: Agencies quote the lowest service charges based on prescribed techno-financial parameters.
-
Eligible Agencies: Empanelled agencies may include oil manufacturers, oilseed processors, traders, etc.
Incentives for Private Agencies
To encourage private sector participation, the scheme offers incentives:
-
Service Charges: Maximum eligible service charges may be 15% of the MSP.
-
Business Environment: A facilitative business environment is offered as per state industrial/agro-processing policies.
-
Market Fee Exemption: State governments will exempt market fees levied under respective Mandi Board Acts.
-
Stock Handling: The holding/disposal of stocks will be as per the terms agreed between the state government and the private agency.
Disposal Mechanism
The disposal mechanism under the PPSS includes:
-
No Sales During Procurement: Private agencies are not allowed to sell the procured quantities during the procurement period notified under PDPS/PSS.
-
Agency Responsibility: The private agency is responsible for all forms of handling, storage, transportation, and disposal of the procured commodity.
Monitoring Mechanism
The PPSS is monitored through:
-
State Level Monitoring Committee (SLMC): Chaired by the Chief Secretary, with representatives from related departments.
-
District Level Monitoring Committee (DLMC): Chaired by the Deputy Commissioner/District Collector/District Magistrate, with representatives from related departments and procuring agencies.
-
Both State and District level committees review the progress and effective implementation of the scheme.
Budgetary Support and Reimbursement
The financial aspects of the PPSS are:
-
Reimbursement: The service charges paid to private agencies by the state government will be reimbursed by the Government of India, subject to a maximum of 15% of the MSP value of the procured quantity, including 1% for administrative expenses.
-
Audited Accounts: Reimbursement is made upon submission and vetting of audited accounts.
Impact Analysis and Dispute Resolution
-
Impact Analysis: The DAC&FW may arrange a concurrent and third-party evaluation of the scheme.
-
Dispute Resolution: Any disputes between the private agency and the State/Central Government will be resolved through the extant applicable legal procedure.
Conclusion
The Private Procurement & Stockist Scheme (PPSS) for oilseeds is a pilot initiative designed to explore the potential of private sector involvement in MSP operations. By assessing the workability of private agencies, the scheme aims to enhance procurement efficiency, promote value addition, and ultimately benefit farmers. The PPSS reflects the government’s commitment to exploring innovative solutions for a more robust and sustainable agricultural sector.