PM
KISAN BHAI – GOVERNMENT SCHEME
News:
Aimed at breaking
traders’ monopoly, Centre to launch PM-Kisan Bhai scheme
What's
in the news?
●
To help small and marginal farmers, who do
not have capacity to hold their produce in warehouses and wait for better
prices, the Centre plans to incentivise them under a scheme likely to be named
PM-Kisan Bhai (Bhandaran Incentive) scheme.
Key
takeaways:
●
At a total cost of ₹170 crore for 3 years,
scheme to be launched on pilot basis in 7 States from this fiscal.
PM
Kisan Bhai Scheme:
Objective:
●
To help
small and marginal farmers, who do not have capacity to hold their produce
in warehouses and wait for better prices, the Centre plans to incentivise them
under a scheme likely to be named PM-Kisan Bhai (Bhandaran Incentive) scheme.
●
This is considered as an attempt to disrupt traders' monopoly on
determining crop prices.
●
Kisan Bhai is expected to empower farmers
by allowing them to keep their crops for
at least three months after harvest.
●
This initiative grants farmers the
autonomy to sell when they want, as
opposed to the current system, in which most crops are sold during the
harvesting season, which normally lasts 2-3 months, with dealers and stockists
controlling supplies throughout the off-season.
Pilot
launch of the scheme:
●
In the first phase, the scheme may be
implemented on pilot basis in Andhra
Pradesh, Assam, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu and Uttar
Pradesh with an estimated expenditure of ₹170 crore in three years
including the current fiscal year.
●
In order to address these restriction,
there appears to be a strong need for incentivising
storing of farmers’ produce in scientifically built warehouses and further
reducing the interest rate on pledge finance availed against a secured
instrument of e-Negotiable Warehouse
Receipts (eNWRs) through Prompt Repayment Incentive (PRI) on trading such
eNWR via e-National Agriculture Market (e-NAM) platform or other registered
e-trading platforms interoperable with e-NAM.
Major
components of the scheme:
●
There are two components of the proposal —
Warehousing Rental Subsidy (WRS) and Prompt Repayment Incentive (PRI).
Warehousing
Rental Subsidy (WRS):
●
Small and marginal farmers as well as
farmer producer organisations (FPOs) will be eligible to avail WRS benefit at ₹4 per quintal per month irrespective of
rate of warehousing (storage) rental charges and also whether charged per
quintal basis or area basis by warehouse operator.
●
The government has proposed that the
storage incentive will be provided for a maximum period of three months.
●
Besides, the produce stored for 15 days or
less will not be eligible to avail the subsidy.
●
The storage incentive will be calculated
on a day to day basis.
Prompt
Repayment Incentive (PRI):
●
Under PRI, the government proposes to extend the 3 percent additional interest
subvention under Kisan Credit Card (KCC) scheme so that farmers can pledge
their produce and get a loan at subsidised interest rate.
●
All
KCC holder farmers will be eligible for prompt repayment
incentive @3 percent lesser interest rate for three months on stocking their
produce with registered warehouses, availing digital finance against eNWR and
trading via eNAM.
●
Once farmers get desired monetary support
for storage during harvesting season they will be in a position to refuse the
buyer dictated prices.
●
By promoting e-NWR trade through online
portal e-NAM, farmers will get access to a large number of buyers across the
country, the official said adding, they will be able to sell the produce even
if it is in a warehouse by using e-NWR on the online platform.