The agricultural sector is the backbone of the Indian economy, providing livelihoods for a significant portion of the population. However, it is also a sector prone to fluctuations due to various factors, including weather patterns and market dynamics. To mitigate these challenges, the Indian government has implemented several schemes and policies, one of the most important being the Market Intervention Scheme (MIS). This piece explores the MIS and its significance in supporting Indian agriculture.
What is the Market Intervention Scheme (MIS)?
The MIS is a government initiative designed to protect farmers from distress sales. These sales often occur during bumper crop seasons when the market is flooded with produce, leading to a sharp decline in prices. The scheme aims to intervene in the market to ensure that farmers receive fair prices for their commodities, particularly horticultural products.
Objectives of the MIS in the Agricultural Sector
The MIS serves several key objectives within the agricultural sector:
-
Protecting Farmers: The scheme aims to prevent farmers from being forced to sell their produce at prices below the cost of production.
-
Stabilizing Prices: By intervening in the market, the MIS helps to stabilize prices and reduce volatility, creating a more predictable market environment.
-
Ensuring Fair Returns: The scheme ensures that farmers receive fair returns for their hard work and investments.
How the MIS Works
The MIS operates as a safety net for farmers, particularly those growing horticultural crops. When prices of these commodities fall below economic levels, the government steps in to procure the produce at a predetermined price. This intervention helps to:
-
Prevent Distress Sales: Farmers are not forced to sell their produce at throwaway prices.
-
Maintain Market Balance: The scheme helps to balance the supply and demand in the market.
-
Support Rural Livelihoods: By ensuring fair prices, the MIS contributes to the economic well-being of farmers and rural communities.
Financial Assistance and Sharing Pattern
The financial burden of the MIS is shared between the Central and State governments. The sharing pattern is as follows:
-
General States: The loss is shared on a 50:50 basis.
-
North-Eastern States: The loss is shared on a 75:25 basis, with the Central government bearing a larger share.
-
Maximum Loss: The total loss borne by the government is capped at 25% of the total procurement value.
Eligibility and Implementation
The MIS is available to states and union territories that agree to share the losses as per the prescribed pattern. The scheme is primarily focused on horticultural commodities. To initiate the MIS, the State or UT government needs to submit a proposal to the Central government, detailing the specific commodity and the need for intervention. The Department of Agriculture & Cooperation manages the scheme, with the Joint Secretary, Cooperation Division, acting as the main point of contact.
The MIS in the Context of Indian Agriculture
The MIS is a crucial component of India’s agricultural policy, complementing other initiatives like the Minimum Support Price (MSP) system. While the MSP primarily focuses on staple crops, the MIS addresses the price volatility of horticultural products. This is important because:
-
Horticulture is a Key Sector: Horticulture contributes significantly to the agricultural GDP and provides livelihoods to many farmers.
-
Price Volatility: Horticultural products are often more susceptible to price fluctuations due to their perishable nature and seasonal supply.
-
Farmer Empowerment: By ensuring fair prices, the MIS empowers farmers and encourages them to continue investing in agriculture.
Financial Aspects of the MIS
The provided data highlights the financial allocations and expenditures under the MIS:
-
12th Plan Allocation: The proposed allocation for the 12th plan was ₹1274.50 crores.
-
Actual Expenditure: The actual expenditure was ₹213.34 crores, which is 17% of the proposed allocation.
-
Expenditure Trends: The expenditure varied across different years, with some years showing higher expenditure due to market conditions. For example, there was an excess expenditure of ₹7.35 crores in 2014-15 due to sudden decrease of funds at RE stage.
Conclusion
The Market Intervention Scheme is a vital mechanism for supporting the Indian agricultural sector. By providing a safety net for farmers during times of market distress, the scheme ensures fair prices, promotes market stability, and contributes to the overall economic well-being of the agricultural community. It is a testament to the Indian government’s commitment to supporting its farmers and ensuring the sustainability of the agricultural sector.