Price support scheme
Also called: PSS · Topic: Agricultural Marketing, MSP, Buffer Stocks and PDS · NCERT: Beyond NCERT
Meaning
Under the price support scheme (PSS), central agencies physically buy pulses, oilseeds and copra from farmers at MSP. This happens when market prices fall below MSP. NAFED and NCCF do the buying. PSS is part of PM-AASHA (2018). It extends MSP support beyond wheat and rice, but only up to procurement ceilings, which cap buying at a share of a state's output. The ceilings were raised for tur, urad and masur.
Example
After a good harvest, the market price of tur (arhar) falls below its MSP. NAFED steps in and buys tur from farmers at MSP.
Don't confuse with
- Price deficiency payment (PDPS): under PDPS, the government buys nothing. The farmer sells in the market and receives the gap between MSP and the market price.
- Market intervention scheme (MIS): MIS covers perishables that have no MSP.
Related concepts
- Procurement
- Buffer stock
- Buffer stock norms
- Operational stock
- Strategic reserve
- Open-ended procurement
- Centralised procurement
- Decentralised procurement
- Price deficiency payment
- Market intervention scheme