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Price Support Scheme (PSS) procurement

The Price Support Scheme (PSS) is the operational instrument under which the Central Government, through nominated agencies, procures notified pulses, oilseeds, copra and (separately) cotton from farmers at MSP when mandi prices fall below the announced MSP. It is administered by the Department of Agriculture & Farmers Welfare (DA&FW) for pulses-oilseeds-copra and by the Ministry of Textiles for cotton, and is one of three constituent schemes of the 2018 PM-AASHA umbrella.

Scope and central agencies

PSS covers the following crops with these nodal procurement agencies:

  • Pulses (tur, urad, moong, chana, masur): NAFED is the central agency, with state cooperative federations as operating partners
  • Oilseeds (groundnut, soybean, sunflower, sesamum, safflower, rapeseed-mustard, niger): NAFED
  • Copra (milling and ball): NAFED
  • Cotton: Cotton Corporation of India (CCI) — see CCI cotton procurement
  • Raw jute: Jute Corporation of India (JCI)

Paddy and wheat MSP procurement is operationalised separately through FCI under the central pool — not under PSS. See FCI procurement mechanism.

Trigger and approval flow

PSS is reactive — it is invoked when:

  1. State government records that mandi prices for a notified PSS crop have fallen below MSP
  2. State requests Centre to open PSS procurement under specific conditions (district, crop, quantity ceiling)
  3. DA&FW examines the request and issues a procurement notification with quantity limits — typically 25% of state production for the season, capped at a maximum quantity
  4. NAFED / CCI mobilise state-partner agencies and open notified procurement centres

Operational mechanics

  • Farmers register on the state procurement portal (e-Markets AP, e-Krishi Yantra Anudan in MP etc.) before the procurement window opens, declaring pattadar, Aadhaar, bank, sown area
  • At the procurement centre, produce is checked for FAQ — moisture %, foreign matter, broken/damaged kernels, oil content
  • Weighment, lot tagging, payment authorisation
  • MSP is credited to the Aadhaar-seeded bank account through DBT, typically within 7-15 working days
  • Stock is moved to NAFED/CCI/JCI warehouses for disposal through tenders, retail, processing or buffer transfer

Cost-sharing and losses

PSS losses (cost of MSP procurement + operational expenses minus disposal proceeds) are borne mostly by the Centre. Specific quantity caps apply: the Centre's procurement under PSS is typically capped at 25% of state production of the crop per year. The pulses buffer stock — separately funded by the Price Stabilisation Fund — overlaps with PSS pulses procurement.

How farmers register

Farmers register at the state-level portal in the pre-procurement window. Required documents: pattadar passbook / land record extract, Aadhaar, bank passbook, mobile number. After registration, a slot date at a notified collection centre is allotted. Procurement is FAQ-grade only; FAQ specifications and per-farmer quantity caps (typically 25-40 quintals for pulses/oilseeds) are notified by DA&FW.

Limitations

PSS is reactive and lags the post-harvest price crash by 4-8 weeks; storage capacity and gunny supply bottleneck operations; per-farmer caps limit the scheme's share of the marketed surplus; disposal at sub-MSP prices generates fiscal losses. The 2018 PM-AASHA umbrella tried to combine PSS, PDPS and Private Procurement Stockist Scheme (PPSS) — physical procurement under PSS remains the dominant mode in practice.

See also: MSP — Minimum Support Price, NAFED procurement, Market Intervention Scheme, Price Deficiency / Bhavantar, CCI cotton procurement.

Sources

  1. Price Support Scheme operational guidelines. Department of Agriculture & Farmers Welfare.
  2. PM-AASHA umbrella. Press Information Bureau.
  3. PSS procurement operations. National Agricultural Cooperative Marketing Federation of India.