The government’s Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) is designed to strengthen the implementation of Minimum Support Price (MSP) and ensure remunerative prices for farmers, particularly when market prices fall below the MSP.
Launched in September 2018, the scheme brings together multiple price-support mechanisms covering different crops and market conditions. Its broader objective is to protect farmers from distress sales while maintaining a balance between farm-gate prices and consumer price stability.
For 2026-27, the government has allocated Rs 7,200 crore to PM-AASHA, compared with Rs 6,941.36 crore in 2025-26. Actual expenditure under the scheme stood at Rs 5,437.99 crore in 2024-25.
What is PM-AASHA?
PM-AASHA is a framework through which the government seeks to ensure better price realisation for farmers. It combines four major components:
Price Support Scheme (PSS)
Price Stabilization Fund (PSF)
Price Deficiency Payment Scheme (PDPS)
Market Intervention Scheme (MIS)
The mechanism applied depends on the crop, market conditions and the nature of the price problem.
While PSS involves physical procurement of selected crops at MSP, PDPS provides a financial payment to eligible farmers when market prices fall below MSP. PSF focuses on managing price volatility in essential commodities, while MIS addresses sharp price declines in perishable horticultural commodities for which MSP is not applicable.
How does the Price Support Scheme work?
Under the Price Support Scheme, the government procures pulses, oilseeds and copra at MSP when market prices fall below the announced support price.
Procurement is carried out by central agencies such as the National Agricultural Cooperative Marketing Federation of India (NAFED) and the National Cooperative Consumers’ Federation of India (NCCF) in coordination with state governments.
From the 2024-25 procurement year, procurement of pulses, oilseeds and copra was initially permitted up to 25 per cent of a state or Union Territory’s production. Additional procurement can be approved by the Committee of Secretaries up to 25 per cent of national production.
There is a special provision for Tur, Urad and Masur, for which procurement can be undertaken up to 100 per cent of state production. The measure is aimed at encouraging domestic pulse production and reducing dependence on imports.
The system allows government agencies to step in when market prices weaken, providing farmers an alternative to selling their produce at distressed prices.
What happens when the government does not physically procure the crop?
Physical procurement is not the only way PM-AASHA supports farmers.
Under the Price Deficiency Payment Scheme (PDPS), farmers do not have to physically sell their produce to a government procurement agency. Instead, eligible farmers receive the difference between the MSP and the actual market price in a notified market, subject to the scheme’s prescribed limit.
The payment can cover up to 15 per cent of the MSP value and is transferred directly into the farmer’s bank account.
The mechanism is primarily used for oilseeds and is intended to provide MSP-linked protection without requiring the government to purchase, transport and store large quantities of physical produce.
This approach can reduce the logistical and storage burden associated with large-scale procurement while ensuring that eligible farmers receive financial support when market prices fall below MSP.
How does the government manage price volatility?
The Price Stabilisation Fund (PSF) is aimed primarily at managing sharp fluctuations in the prices of essential agricultural commodities.
Under the mechanism, commodities such as pulses, onions and potatoes can be procured during the harvest season to create buffer stocks. These stocks can then be released when supplies tighten or prices begin to rise sharply.
The objective is twofold: support farmers during periods of low prices and protect consumers from sudden price increases.
The Price Stabilisation Fund has been merged with PM-AASHA, although it continues to be managed by the Department of Consumer Affairs.
Buffer stocks therefore serve as a market-balancing tool, allowing the government to intervene at different points in the agricultural price cycle.
What is the Market Intervention Scheme?
The Market Intervention Scheme (MIS) caters to perishable agricultural and horticultural commodities for which MSP is not applicable.
It can cover commodities such as tomatoes, onions and potatoes when market prices fall sharply because of excess production or a market glut.
The scheme is activated when prices decline by at least 10 per cent compared with normal rates of the previous season.
Operations are undertaken through central agencies such as NAFED and NCCF, with the Centre and states sharing the cost.
The mechanism is particularly relevant for perishable commodities because farmers have limited storage options and cannot hold their produce indefinitely in the expectation of better prices.
How is technology changing procurement?
The government has increasingly used digital systems to make procurement more transparent and efficient.
These include:
Aadhaar-enabled authentication
e-NAM
e-Samriddhi
e-Samyukti
Biometric authentication of farmers
Direct procurement from pre-registered farmers
These systems are intended to improve farmer identification, reduce leakages and make payments and procurement operations more transparent.
The government has also expanded agricultural infrastructure and market connectivity.
According to government data, the Agriculture Infrastructure Fund has sanctioned loans worth Rs 96,426 crore for 2,14,437 projects.
The e-NAM platform has integrated 1,656 mandis across 23 states and four Union Territories, with trade worth Rs 4,94,847 crore.
The government has also sanctioned 50,249 warehouses with a combined storage capacity of 992.6 lakh metric tonnes, along with 25,081 agricultural marketing infrastructure projects.
Together, these initiatives are intended to strengthen the infrastructure needed for procurement, storage, transportation and market access.
How does MSP compare with production costs?
The government maintains that MSPs for various crops provide farmers with a margin over their estimated production costs.
For 2026-27, the estimated production cost of common paddy is Rs 1,627 per quintal, against an MSP of Rs 2,441, providing a margin of Rs 814 per quintal.
For soybean (yellow), the production cost is estimated at Rs 3,805 per quintal, compared with an MSP of Rs 5,708, resulting in a margin of Rs 1,903.
For wheat, the production cost is Rs 1,239 per quintal, against an MSP of Rs 2,585, providing a margin of Rs 1,346.
For jute, the production cost is Rs 3,662 per quintal, compared with an MSP of Rs 5,925, resulting in a margin of Rs 2,293.
These figures form part of the government’s argument that MSPs are intended to provide farmers with returns above their estimated production costs.
What is happening on the ground?
The government has highlighted procurement operations in Bihar and Chhattisgarh as examples of efforts to expand the reach of PM-AASHA.
Bihar: In Bihar, organised procurement of masoor was initiated for the first time through NCCF. Procurement is being carried out through 48 Primary Agricultural Credit Societies (PACS) and Farmer Producer Organisations (FPOs).
As of August 10, 2026, NCCF had procured 1,042.65 metric tonnes of masoor, with 358 farmers registered and 285 benefiting.
During the same period, NAFED procured 1,814.13 metric tonnes of masoor, registering 495 farmers and benefiting 455.
The initiative is intended to expand organised procurement at the local level and give pulse growers greater access to MSP-linked mechanisms.
Chhattisgarh: In Chhattisgarh, procurement operations have been expanded through 200 operational PACS and 12 FPOs.
As of August 10, NCCF had procured:
18,392.228 metric tonnes of chana
22.231 metric tonnes of masoor
1,035.0205 metric tonnes of mustard
The agency had registered 21,721 farmers, of whom 13,790 had benefited.
NAFED had procured 17,020.65 metric tonnes of chana and 355.05 metric tonnes of masoor, registering 46,146 farmers and benefiting 13,673.
The figures indicate the scale at which procurement agencies are being used to widen access to price-support mechanisms in producing states.
Why does PM-AASHA matter?
The central objective of PM-AASHA is to strengthen the connection between the MSP announced by the government and the actual price realised by farmers.
Different components of the framework address different market situations. PSS provides physical procurement, PDPS provides financial compensation for eligible price deficiencies, PSF creates buffer stocks to manage volatility, and MIS allows intervention in perishable commodities that do not have MSP coverage.
The government is also expanding procurement centres, digital authentication systems, storage facilities and market infrastructure to improve the reach of these mechanisms.
The greater participation of agencies such as NAFED and NCCF, along with PACS and FPOs, is intended to take procurement closer to farmers and improve access to government-supported markets.
Overall, PM-AASHA is designed as a multi-layered price-support framework. Its aim is to provide farmers with greater price assurance, reduce distress sales and strengthen agricultural markets while ensuring that interventions do not lead to prolonged shortages or excessive price increases for consumers.
