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LATEST NEWS UPDATES | Madhya Pradesh's new scheme to protect farmers against fall of crop prices stumbles at the start -Mridula Chari

Madhya Pradesh's new scheme to protect farmers against fall of crop prices stumbles at the start -Mridula Chari

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published Published on Nov 25, 2017   modified Modified on Nov 25, 2017
-Scroll.in

Halfway through the ambitious Bhavantar Bhugtan Yojana, farmers are protesting and accusing traders of suppressing prices.

When the Madhya Pradesh government introduced the Bhuvantar Bhugtan Yojana in August it hoped the new scheme would assuage angry farmers and provide them a cushion against a possible price crash of farm produce. But in the first harvest season after the scheme was introduced farmers continue to get prices below their expectations.

Many farmers believe the scheme has provided traders the opportunity to form cartels and artificially depress prices of produce such as soyabean. Protests have ensued.

The scheme was introduced by the BJP state government in response to farmers’ protests against falling prices in June. The protests turned violent, five people died, and the state government, fearing a political fallout, reacted to launch the new scheme.

Till then, like in all other states, the Madhya Pradesh government used to depend on a minimum support price declared by the centre for 25 crops grown during the kharif and rabi season. If the farmers found market prices to be lower, they had the option to sell their produce to the state or central government at the minimum support price. In practice, wheat and paddy, which are channelled into the Public Distribution System, were the only crops to be procured on a significant scale.

The actual procurement by government agencies also remained mired in controversy and accusations of inefficiency. Madhya Pradesh said it wanted to plug these gaps. It introduced the Bhavantar Bhugtan Yojana for eight crops to begin with.

Under the scheme the government continues to use the minimum support price as a guide. But it does not buy the produce from the farmer. Instead it partly compensates the farmer for the difference between the prevailing market prices and the minimum support price it declares. The compensation is based on the average sale price of the specific crop in Madhya Pradesh and two other neighbouring states, calculated at the end of the season. The most the state is required to pay farmers is the difference between the average sales price of a commodity and the minimum support price.

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Scroll.in, 24 November, 2017, https://scroll.in/article/858462/madhya-pradeshs-new-scheme-to-protect-farmers-against-fall-of-crop-prices-stumbles-at-the-start


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