Procurement caps under PM-AASHA balance fiscal prudence against farmer welfare but weaken the MSP assurance in distress years. Critically examine with reference to recent state demands.

Under PM-AASHA's Price Support Scheme (PSS), the Centre buys pulses, oilseeds and copra at MSP. It does so first only up to 25% of a state's production [2]. With 315 of its 621 mandals drought-hit, Telangana has demanded that this cap be lifted [1]. Its demand tests whether the ceiling is prudent design or an assurance that has been emptied out.

Caps as fiscal prudence

• Bounded liability: PM-AASHA has ₹7,200 crore for 2026-27, about 5% of the Agriculture Ministry's budget [3]. Open-ended buying would multiply that cost.
• No pile-up of stocks: PDPS pays farmers the price gap, up to 15% of MSP, on 40% of a state's oilseed output. The government does not have to store or sell any grain [2].
• Room to go higher: the Committee of Secretaries can approve buying up to 25% of national production [2]. Tur, urad and masoor have 100% procurement through 2028-29 [5].

How caps weaken MSP assurance in distress years

• The cap shrinks in a drought: 25% of a drought-reduced harvest is fewer tonnes, just when distress peaks.
• Only part of the crop is covered: produce beyond the cap is exposed to market prices. This is why Telangana seeks 100% procurement of maize and jowar [1].
• Uneven exemptions: relief is given crop by crop. The Parliamentary Standing Committee on Agriculture (March 2026) recommended raising pulse and oilseed procurement from 25% to full production [4].

Limits of the state demand

• The cap is rarely what stops buying: only about 3% of pulse output was bought under PSS in 2024-25 [6]. Too few procurement centres and too little agency capacity hold buying back.
• Wrong instrument: maize and jowar are cereals and fall outside PSS. The demand is really for a new support system.
• Price support cannot pay for a lost crop: a farmer whose crop has withered has nothing to sell. Wage work, micro-irrigation and inter-cropping seed, which Telangana also wants [1], reach that farmer.

Caps protect the exchequer, but because they are tied to current output, they tighten exactly in drought years. A better path would:

• set drought-year caps on a normal year's output;
• pilot PDPS for coarse cereals;
• build more procurement centres;
• pair price support with PMFBY and SDRF relief.

This keeps MSP credible and affordable, in line with SDG 2 and the Standing Committee's direction [4].