Representative Photo
Representative Photo

The Bharatiya Janata Party government in Madhya Pradesh is planning to relaunch its Bhavantar Bhugtan Yojana from October, a senior state government official said today. The Congress, which was in power in the state then, halted the scheme nearly a year back. "The previous Congress government in the state was not keen on it, but the current government wants to roll it out again this year to benefit primarily soybean farmers in kharif season," the official said.

The government may then extend the scheme for rabi crops as well, the official added. Under the Bhavantar Bhugtan Yojana, the state government pays farmers the difference between a crop's modal price and minimum support price, in case the former falls below the latter.

The government credits the amount directly into the accounts of registered farmers. Sowing of the 2020-21 (Jul-Jun) kharif crops is underway and harvesting would begin from end of September. Arrivals would commence in full swing from October. The state is most likely to start the scheme during that time, the official said. Madhya Pradesh is the largest grower of soybean in the country.

Prices usually fluctuate when spot markets arrivals hit the peak in Oct-Dec, the official said. Procurement at minimum support price requires huge storage facilities and the whole process could lead to massive expenses. However, paying farmers the difference between the market price and the minimum support price is a win-win for the government and growers, he said. NITI Aayog, the central government's think-tank, is keen on the introduction of the scheme in other states to reduce the financial burden on the exchequer caused by procurement at minimum support price, the official said.

However, there are some concerns in the scheme which needs to be addressed at earliest, he said. The scheme was applicable on crops brought into the market within specified months, which triggered an oversupply during that period, and led to a fall in prices of the commodities, traders said.

The small window of selling the produce under the scheme also led to distress sale in the spot markets. To solve these problems, efforts would be made to widen the window of the scheme, and strict action would be taken against traders who try to manipulate prices and get more money from the exchequer, the official said. Earlier, in some cases, traders manipulated prices by convincing the farmers to sell their produce at low rates as the government was paying them the difference. This led to an artificial collapse in prices while the scheme was open.

In 2018-19 (Jul-Jun), soybean, maize and garlic crops were covered under the scheme. The state had made an allocation of 12.5 bln rupees for farm and horticulture crops for the scheme in the financial year 2018-19. In same crop year, the scheme was tweaked form and rechristened as Flat Bhavantar Bhugtan Yojana under which a beneficiary received a flat rate for the crop, irrespective of whether prices were above or below the minimum support price.

The BJP government initially covered all the major crops under the scheme in its year of inception 2017-18, he said, adding a year later, it covered only three crops. Madhya Pradesh became the first state to launch the scheme, which is the state's version of Centre's flagship Price Deficiency Payment Scheme, on a pilot basis to cover all the crops in last Kharif season and rolled it out in rabi season in 2017-18 (Jul-Jun) for only horticulture crops.

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