S Ahmad
Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) is the Government’s flagship price-support framework for remunerative prices for farmers. It includes various schemes to strengthen the implementation of the Minimum Support Price (MSP) and reduce distress sales. Procurement of pulses, oilseeds, and copra is undertaken by the Central and State Governments through agencies such as NAFED and NCCF. With a ₹7,200 crore Budget allocation for 2026–27, PM-AASHA strengthens effective price-support interventions. Digital reforms, including Aadhaar-enabled authentication, e-NAM, e-
Samriddhi, and e-Samyukti, have improved transparency and procurement efficiency. Support from the Agriculture Infrastructure Fund and expanded procurement coverage have further strengthened the scheme.
For an Indian farmer, the harvest season is supposed to be the reward for months of labour, investment and uncertainty. Yet it is often precisely when the crop is ready that another uncertainty begins: what price will the market offer?
A bumper harvest can become a source of anxiety when supply exceeds demand. A sudden fall in prices can erase months of effort. Perishable commodities can lose value within days. Pulses and oilseeds can be particularly vulnerable when market prices fall sharply at harvest time. For small and marginal farmers, who often have limited storage capacity and immediate financial obligations, waiting for better prices may not be a realistic option.
This is the underlying economic problem that makes price assurance an essential part of agricultural policy.
The Pradhan Mantri Annadata Aay Sanrakshan Abhiyan, or PM-AASHA, represents an attempt to address that problem by strengthening the mechanisms through which farmers can obtain remunerative prices and reduce distress sales. Launched in 2018, the framework brings together several instruments aimed at supporting farmers when market prices fall below levels considered remunerative, while also seeking to maintain reasonable prices for consumers.
Its importance has grown as India seeks to strengthen agricultural incomes, reduce excessive dependence on imports of key commodities and build more resilient farm markets.
For 2026-27, the budget allocation for PM-AASHA has been raised to ₹7,200 crore, from actual expenditure of ₹5,437.99 crore in 2024-25 and a budget allocation of ₹6,941.36 crore in 2025-26. The increase reflects a recognition that price support requires institutional capacity, procurement infrastructure and increasingly sophisticated market interventions.
But the significance of PM-AASHA goes beyond the size of its budget.
Its larger contribution lies in attempting to change the bargaining position of the farmer.
In a conventional market, the farmer often arrives with a perishable or time-sensitive commodity and limited information about demand, while the buyer may possess greater knowledge of market conditions and greater ability to wait. The farmer therefore becomes a price-taker.
An effective price-support system can alter that equation. When a farmer knows that there is an institutional mechanism capable of purchasing the crop at MSP under specified conditions, the threat of a complete price collapse becomes less severe.
That does not mean every farmer automatically receives MSP for every crop. Nor should PM-AASHA be understood as a blanket guarantee that eliminates market forces. Its effectiveness depends on procurement arrangements, eligibility, market conditions, infrastructure and the actual reach of the system.
But the principle is important: agricultural markets work better when producers are not forced to sell under distress.
PM-AASHA brings together four major components—Price Support Scheme, Price Stabilization Fund, Price Deficiency Payment Scheme and Market Intervention Scheme. Each addresses a different dimension of agricultural price volatility.
The Price Support Scheme is perhaps the most direct instrument. When market prices fall below MSP during harvest, eligible pulses, oilseeds and copra can be procured through agencies such as NAFED and NCCF at the request of state governments.
This is particularly significant for pulses and oilseeds because India’s domestic production and consumption patterns have major implications for food security and import dependence.
The procurement framework has also been strengthened. From the 2024-25 procurement year, procurement of pulses, oilseeds and copra under the Price Support Scheme is initially permitted up to 25 per cent of a state or Union Territory’s production, with additional procurement subject to specified approvals. For tur, urad and masur, however, procurement can extend up to 100 per cent of state production—a measure designed to encourage domestic production and reduce dependence on imports.
This creates an important link between price policy and national food strategy.
If farmers believe that producing pulses will expose them to severe price risk at harvest, they may prefer other crops. If price assurance becomes more credible, cultivation decisions can change.
That matters because India’s agricultural policy cannot be separated from its import bill. Increasing domestic production of pulses and oilseeds is not simply about supporting farmers; it can also strengthen food and nutritional security and reduce vulnerability to international price shocks.
Yet procurement is only one part of the answer.
The Price Stabilization Fund addresses the opposite side of the problem: consumers facing sharp increases in food prices. Essential commodities such as pulses, onions and potatoes can experience significant price fluctuations because agricultural production is seasonal and weather-dependent.
The mechanism allows commodities to be procured during periods of relative abundance and released when supplies tighten. In this way, the government can seek to moderate extreme price movements.
This dual objective—protecting farmers from excessively low prices while protecting consumers from excessively high prices—is one of the central challenges of agricultural policy.
A price that is attractive to the producer can become burdensome for the consumer if food prices rise sharply. Conversely, an exceptionally low consumer price may translate into an unsustainable return for the farmer.
A functioning agricultural economy therefore needs mechanisms that reduce volatility at both ends.
The Price Deficiency Payment Scheme takes a different approach. Instead of physically procuring the farmer’s produce, the farmer receives a payment representing the difference between MSP and the actual market price in the notified market, subject to the prescribed ceiling.
This can reduce the need for large-scale physical procurement and storage. It also allows the market to continue functioning while providing a degree of price protection.
For oilseed producers in particular, such mechanisms can potentially combine market-based transactions with income protection.
The Market Intervention Scheme addresses another weakness of agricultural markets: crops for which conventional MSP does not apply, particularly perishable horticultural commodities.
Tomatoes, onions and potatoes illustrate the problem. Farmers can experience periods of severe oversupply in which prices collapse because production cannot be stored indefinitely. A glut that is beneficial to consumers can be devastating to producers.
The Market Intervention Scheme is designed to intervene when prices fall by at least 10 per cent compared with the previous normal season’s rates, allowing procurement and related interventions through central nodal agencies with cost-sharing between the Centre and states.
This is particularly relevant to perishable commodities because the farmer’s bargaining power deteriorates rapidly as the product’s shelf life declines.
A farmer who can store wheat for several months has more flexibility than a farmer carrying a truckload of tomatoes that may spoil within days.
Agricultural price policy must therefore recognise that not all commodities experience markets in the same way.
The broader PM-AASHA framework does so by combining different instruments rather than relying on a single intervention.
But a modern price-support system cannot depend solely on government procurement centres. The agricultural market itself has to become more efficient.
This is where digital reforms and infrastructure assume importance.
Aadhaar-enabled authentication, e-NAM, e-Samriddhi and e-Samyukti are part of a broader attempt to make procurement more transparent, reduce duplication and improve the connection between farmers and formal markets.
Digital authentication can help ensure that procurement benefits reach registered farmers. Online platforms can improve price discovery and connect markets that were previously separated by geography.
The e-NAM platform has integrated 1,656 mandis across 23 states and four Union Territories and facilitated trade worth ₹4,94,847 crore, according to the figures provided. It has also registered 4,776 Farmer Producer Organisations.
These developments matter because physical market infrastructure and digital market infrastructure increasingly need to work together.
A farmer does not benefit from knowing that a better price exists 500 kilometres away if there is no practical mechanism to sell the crop there. Digital price discovery becomes meaningful when supported by transportation, storage, grading, assaying and payment systems.
This is why the Agriculture Infrastructure Fund is another important part of the larger agricultural reform architecture.
The fund has sanctioned loans worth ₹96,426 crore for 2,14,437 projects, while investments exceeding ₹1.66 lakh crore have been mobilised, according to the government data supplied. Alongside this, 50,249 warehouses with a combined storage capacity of 992.6 lakh metric tonnes have been sanctioned, while thousands of agricultural marketing infrastructure projects are being supported.
Infrastructure changes the economics of farming because it changes the farmer’s options.
Without storage, the farmer may be compelled to sell immediately after harvest. With adequate storage, the producer can potentially wait for a more favourable market. With cold-chain facilities, perishable commodities have a longer commercial window. With grading and processing facilities, the producer can sell a higher-value product rather than raw produce.
The real objective should therefore be to give farmers choices.
MSP can provide a floor. Storage can provide time. e-NAM can provide information. FPOs can provide collective bargaining power. Infrastructure can provide market access. Processing can provide value addition.
Together, these mechanisms can create a stronger agricultural market than any single intervention could achieve.
This is particularly important for small and marginal farmers.
An individual farmer producing a relatively small quantity has limited bargaining power when negotiating with large buyers. An FPO can aggregate that production, reduce transaction costs and potentially negotiate better terms.
The expansion of FPO participation in digital markets therefore deserves continued attention. The reported onboarding of thousands of FPOs on e-NAM and the Open Network for Digital Commerce creates the possibility of moving agricultural marketing from fragmented transactions towards organised collective selling.
But technology should not be mistaken for transformation by itself.
A digital platform cannot solve the problem of poor roads, inadequate storage, insufficient working capital or weak farmer organisations. Nor can an app substitute for reliable local procurement when prices collapse.
Digital reforms are most effective when they are embedded within a physical agricultural ecosystem.
This is also why recent reforms under PM-AASHA—such as biometric farmer authentication, direct procurement from pre-registered farmers, transportation support for TOP crops and price differential payments—are important. They attempt to reduce leakage, improve targeting and respond more directly to the realities of farm markets.
The experiences emerging from different states provide a useful indication of what implementation can look like on the ground.
In Bihar, organised procurement of masoor through NCCF has been initiated for the first time under PM-AASHA. The programme is operating through 48 PACS and FPOs. As of August 10, 2026, NCCF had procured 1,042.65 metric tonnes of masoor, registering 358 farmers and benefiting 285. NAFED had procured another 1,814.13 metric tonnes, registering 495 farmers and benefiting 455.
Chhattisgarh provides another example of expanded procurement infrastructure. Operations have been supported through 200 operational PACS and 12 FPOs. By August 10, NCCF had procured more than 18,392 metric tonnes of chana, along with quantities of masoor and mustard, while registering more than 21,700 farmers. NAFED had separately procured more than 17,000 metric tonnes of chana and additional masoor.
These are not merely procurement statistics. They demonstrate the importance of building the institutional network through which a national policy reaches an individual farmer.
A central scheme becomes meaningful only when the farmer knows where to register, where to take the produce, what documents are required, what price applies and when payment will be received.
That is why implementation capacity may ultimately matter more than policy design.
India has developed a substantial framework for agricultural price support. The next challenge is to make that framework predictable, accessible and efficient.
Predictability is particularly important.
Farmers make cropping decisions months before harvest. If procurement arrangements are uncertain, a farmer cannot confidently base production decisions on them. Advance communication about procurement windows, centres, eligibility and quality requirements can therefore influence whether price-support policy actually changes behaviour.
Transparency is equally important. The more clearly farmers can see procurement rules, market prices and payment status, the less room there is for information asymmetry.
There is also a need to maintain a careful balance between price support and market development.
Government procurement is essential in situations where markets fail dramatically, but it cannot replace competitive agricultural markets indefinitely. Excessive dependence on physical procurement can create storage costs, fiscal pressures and distortions in crop patterns.
The ideal outcome is not for the government to become the permanent buyer of agricultural produce. It is for farmers to have credible alternatives.
If private buyers offer a good price, farmers should be free to sell to them. If market prices collapse, the government’s intervention mechanism should provide protection. If prices rise excessively, consumer-oriented stabilization measures should prevent extreme hardship.
In such a system, government intervention acts as a stabilising force rather than the sole mechanism through which agriculture functions.
This is particularly relevant as India seeks to diversify its agriculture.
Pulses and oilseeds deserve attention not only because of price volatility but also because of their importance to nutrition, edible-oil security and import reduction. If PM-AASHA can make cultivation of these crops more economically attractive, it can contribute simultaneously to farmer welfare and national economic resilience.
But diversification must be backed by infrastructure and demand.
Farmers will not permanently shift crops simply because a procurement announcement is made. They need seeds, extension services, irrigation, technology, processing facilities, storage and reliable markets.
Price assurance can create confidence, but the entire value chain must reinforce that confidence.
The figures on MSP margins provided for 2026-27 illustrate the policy intent. Paddy common has a reported production cost of ₹1,627 per quintal against an MSP of ₹2,441, creating a margin of ₹814. For soybean yellow, the corresponding figures are ₹3,805 and ₹5,708, a margin of ₹1,903. Wheat has a production cost of ₹1,239 and MSP of ₹2,585, while jute has a reported cost of ₹3,662 against MSP of ₹5,925.
Such margins are designed to provide farmers with an incentive to continue cultivation while offering some protection against rising input costs and market uncertainty.
But the existence of an MSP above production cost does not by itself guarantee that every farmer realises that price. The critical issue is effective procurement and market access.
This distinction must remain central to the debate around agricultural income.
A price announced on paper and a price actually received by a farmer are not the same thing.
The latter depends on whether procurement centres are available, whether the farmer meets the eligibility conditions, whether the crop meets quality requirements, whether the farmer can transport it and whether payment reaches the bank account promptly.
The policy challenge, therefore, is to close the gap between declared support and realised support.
That is where the next phase of PM-AASHA implementation should concentrate.
More procurement centres in underserved regions can reduce transportation costs. Better digital registration can reduce administrative barriers. Stronger PACS and FPOs can aggregate farmers. Warehouses can reduce distress sales. Cold chains can protect perishables. Better market intelligence can improve decision-making.
And perhaps most importantly, farmers need to know that the system will be there before they make their production decisions.
The ultimate measure of PM-AASHA should not be the amount of money allocated or even the volume procured. It should be whether a farmer can sell a crop without being forced into a loss simply because the market happens to be weak at harvest time.
That is the true meaning of price security.
Agriculture will always involve risk. Weather will remain unpredictable. Global commodity prices will fluctuate. Demand will change. No government programme can eliminate every uncertainty from farming.
But public policy can determine who bears the greatest share of that uncertainty.
A small farmer with limited savings, limited storage and limited access to credit should not be the person who absorbs the entire shock of a market collapse.
A stronger price-support architecture can distribute that risk more fairly.
The larger opportunity is to combine PM-AASHA with the wider transformation taking place in agricultural marketing. MSP protection, digital markets, FPOs, warehouses, rural infrastructure, processing facilities and better logistics can collectively change the economics of farming.
The objective should be to move from a system in which the farmer is simply a producer to one in which the farmer becomes an informed market participant.
That means not merely producing more, but earning more from what is produced.
It means not merely announcing prices, but ensuring price realisation.
It means not merely building mandis, but connecting them to national markets.
And it means not merely supporting procurement, but building an agricultural economy in which farmers have multiple routes to a remunerative market.
PM-AASHA represents an important part of that transition.
Its strongest contribution may ultimately be psychological as much as financial: confidence.
A farmer who believes that a price collapse will not completely destroy the economics of a crop is more willing to invest, diversify and plan for the next season. Confidence encourages production; production strengthens supply; organised markets improve efficiency; and better infrastructure creates opportunities for value addition.
In this sense, price assurance can become an instrument of agricultural growth rather than merely a mechanism for crisis management.
India’s farmer does not need a market without risk. Such a market does not exist.
What the farmer needs is a market in which risk is shared more fairly, information is more transparent, infrastructure is stronger and the possibility of distress sale is reduced.
The purpose of PM-AASHA should therefore be understood in those terms.
MSP can provide the floor. Procurement can provide the immediate safety net. Digital markets can improve price discovery. FPOs can strengthen collective bargaining. Storage can provide time. Infrastructure can create options. And market reforms can gradually make the entire system more competitive.
If these elements work together, India can move closer to an agricultural economy in which the farmer does not approach the market from a position of desperation, but from a position of choice. That is the real test of farmer welfare.
A successful agricultural policy is not one that merely ensures that crops are harvested. It is one that ensures the person who grows them has a fair chance of earning a dignified return.
For India’s journey towards a more resilient and prosperous economy, that principle is not optional. It is foundational.
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