Niti Aayog looks to cut costs with Bhavantar Scheme

Niti Aayog member Ramesh Chand said in an interview with Financial Express that he believes in launching Bhavantar scheme on a pan-India basis. (File Photo)

The Niti Aayog is planning to cut costs by increasing the reach of the Bhavantar Scheme that was first launched in Madhya Pradesh last October.

Niti Aayog member Ramesh Chand said in an interview with Financial Express that he believes that by launching the scheme on a pan-India basis, the Minimum Support Price (MSP) system could become more effective and considerably less expensive.

Chand said that direct cash payments to bridge gaps between the market price and MSP would save costs of procurement expenses like storage, handling, assorted mandi levies and transportation, which normally inflate MSP operation costs by about 50 per cent.

The report said that the Centre's annual expenditure on the procurement of all agricultural crops under MSP schemes was about Rs 1.33 lakh crore in 2017-18.

Chand spoke on the target of doubling farmers' income by 2022. He pointed out that the target could only be achieved by increasing investments in the farming sector through routes like contract farming and dismantling the hold of Agriculture Produce Marketing Committee (APMC) mandis.

He suggested that the farmers should be allowed to sell to other agriculture market players, apart from the APMCs.

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What is Bhavantar Scheme?

The Bhavantar Bhugtan Yojana is a scheme launched by the Madhya Pradesh government to relieve farmer unrest in the state. It was launched after farmers' protests took place around the state over falling prices.

The term 'Bhavantar' means a difference in rates. Under the scheme, the government pays the farmers if the prices of crops fall below the MSP. The scheme was announced for eight kharif crops and four rabi crops.

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