The government’s Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) is aimed at strengthening the implementation of Minimum Support Price (MSP) and ensuring remunerative prices for farmers, particularly when market prices fall below the MSP.
Launched in September 2018, PM-AASHA brings together multiple price-support mechanisms covering different crops and market situations. The scheme seeks to protect farmers from distress sales while also maintaining price stability for consumers.
For 2026-27, the government has allocated Rs 7,200 crore to PM-AASHA, up from Rs 6,941.36 crore in 2025-26. The 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 that farmers receive better prices for their produce. It combines four key components — the Price Support Scheme (PSS), Price Stabilization Fund (PSF), Price Deficiency Payment Scheme (PDPS) and Market Intervention Scheme (MIS).
The mechanism used depends on the crop and prevailing market conditions.
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 support price.
Procurement is undertaken 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 allowed up to 25 per cent of a state’s or Union Territory’s production. Additional procurement can be approved by the Committee of Secretaries up to 25 per cent of national production.
For Tur, Urad and Masur, however, procurement is permitted up to 100 per cent of state production to encourage domestic pulse production and reduce dependence on imports.
What happens when produce is not physically procured?
Under the Price Deficiency Payment Scheme, farmers do not have to physically sell their produce to a government 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 of up to 15 per cent of the MSP value. The payment is made directly into the farmer’s bank account.
The mechanism is mainly used for oilseeds and is intended to provide MSP protection without requiring large-scale physical procurement and storage.
How does the government deal with price volatility?
The Price Stabilization Fund is designed to protect consumers from 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 build buffer stocks. These stocks can subsequently be released during periods of shortage or rising prices to help contain price spikes.
The Price Stabilization Fund has been merged with PM-AASHA but continues to be managed by the Department of Consumer Affairs.
What is the Market Intervention Scheme?
The Market Intervention Scheme is meant for 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. The scheme is activated when prices decline by at least 10 per cent compared with the normal previous season’s rates.
Operations are undertaken through central agencies such as NAFED and NCCF, with the Centre and states sharing the cost.
The scheme is particularly relevant during periods of excess production, when a glut can cause prices to collapse.
How is technology changing procurement?
The government has introduced digital measures to make procurement more transparent and efficient.
These include Aadhaar-enabled authentication, e-NAM, e-Samriddhi and e-Samyukti. Recent reforms have also introduced biometric authentication of farmers and direct procurement from pre-registered farmers.
The government has also expanded support for agricultural infrastructure and market connectivity.
According to the government, 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, alongside 25,081 agricultural marketing infrastructure projects.
How does MSP compare with production costs?
The government says MSPs remain above the cost of production for various crops, providing farmers with a margin over their estimated production costs.
For 2026-27, the production cost of paddy (common) is estimated at Rs 1,627 per quintal, against an MSP of Rs 2,441, giving a margin of Rs 814.
For soybean (yellow), the production cost is Rs 3,805 per quintal against an MSP of Rs 5,708, resulting in a margin of Rs 1,903.
Wheat has a production cost of Rs 1,239 per quintal and an MSP of Rs 2,585, providing a margin of Rs 1,346.
Jute has a production cost of Rs 3,662 per quintal against an MSP of Rs 5,925, giving a margin of Rs 2,293.
What is happening on the ground?
The government has highlighted recent procurement initiatives in Bihar and Chhattisgarh as examples of efforts to expand the reach of PM-AASHA.
In Bihar, organised procurement of masoor was initiated for the first time through NCCF, with procurement being carried out through 48 Primary Agricultural Credit Societies and Farmer Producer Organisations.
As of August 10, 2026, NCCF had procured 1,042.65 metric tonnes of masoor, registering 358 farmers and benefiting 285. During the same period, NAFED procured 1,814.13 metric tonnes of masoor, registering 495 farmers and benefiting 455.
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 and 1,035.0205 metric tonnes of mustard. It had registered 21,721 farmers and benefited 13,790.
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.
Why does PM-AASHA matter?
The central objective of PM-AASHA is to strengthen the link between MSP and actual price realisation by farmers.
Through procurement, price-deficiency payments, buffer stocks and market intervention, the framework seeks to address different situations that can affect farm incomes.
The government says expanded procurement centres, digital authentication, market infrastructure and wider participation of agencies such as NAFED and NCCF are helping improve transparency and market access.
Overall, PM-AASHA is designed to provide farmers with greater price assurance, reduce distress sales and strengthen agricultural markets while balancing the need for consumer price stability.
