Presentation on PSS Operations By NAFED

1. Presentation on PSS Operations ByNAFED Rabi Conference Ministry of Agriculture New Delhi 18-09-2004

2. Historical Background Nafed was Established on October 2, 1958 Under Bombay Cooperative Societies Act. Presently Deemed to Be Registered Under Multi-state Cooperative Societies Act 2002. OBJECTIVE: To Organize, Promote and Develop Cooperative Marketing, Processing and Storage of Agricultural Produce, Distribution of Inputs and Domestic and International Trading of Agricultural Commodities.

3. AIMS • Ready Market and Remunerative Price to Farmer For His Produce • Reduction of Price Spread Between Producer and Consumer • Building up of Internal and Foreign Marketing Channels for Agricultural Produce

4. Main Activities of Nafed • Domestic and International Marketing • Marketing of Agricultural Inputs • Implementation of PSS of GOI • Implementation of MIS of GOI • Consumer Marketing • Industrial Activities • Warehousing • Research & Development

5. Price Support Scheme (PSS) • Aims at Providing Marketing Support to Farmers to Sustain/Improve Production of Oilseeds and Pulses • Nafed Is The Central Nodal Agency for Procurement of Oilseeds and Pulses Under PSS • Price Support Operations Through Two -Tier System • State Marketing/ Oilseed Growers/ Tribal Federations • Primary Marketing And Oilseeds Growers Societies In APMCs (Mandies)

6. Implementation of PSS • GOI Declares Minimum Support Price (MSP) For Each Covered Commodity Before Every Season • State-wise Tentative Targets of Each Commodity Are Arrived at in the Conference • Procurement Commences Whenever Prices Fall Below Declared Minimum Support Price For FAQ Stocks • Procurement Undertaken Without Any Quantitative Ceiling and Continues Till Prices Stabilize Above MSP • Disposal of Stocks As Per Time Tested Business Procedure of Nafed

7. Strengths of Nafed as Nodal Agency • Three-tier Cooperative Network: Ensures Maximum Coverage Under PSS Including A&N Islands & Lakshadweep • Manpower Having Multi-Commodity Expertise: Ensures Efficient Handling Irrespective of Quantum • Commercial Orientation: Ensures Maximisation of Realisation

8. Commodities covered & MSP(2004)

9. Price Support Operations-Quantum Jump PSS Commenced Since 1976-77 • Limited Procurement Till 1999. Value- Rs.380 Crores • From Kharif-99 onwards Procured 26.48 Lakh MTs of Oilseeds and Pulses Value - Rs.3863 Crores • Sizeable Procurement Due To: • Easy Trend in International Prices • Higher Production • Higher MSP

10. Procurement under Price Support Operations (Since Kharif 1999)

11. Reasons Why Entire Production is Not Procured under PSS • Entire Quantity of Marketable Surplus Does Not Match FAQ • Resource Rich Farmers Have Better Stockholding/risk Taking Capacity • Interlocking of Credit and Produce Markets • Since PSS Not Required Regularly, Farmers Having Strong Bond With Arhatias Offer Stocks to Arhatias Only • Payment of Commission to Katcha Arhatias Not Allowed Like FCI • Small Lots Sold to Village Level Aggregator • Prices Stabilise Above MSP Owing to Procurement Under the Scheme

12. Problems Faced in Price Support Operations • Uncertainty in Procurement and Hence Difficulty in Procurement Planning • Disposal of Stocks During Procurement Is Difficult Due to Fear of Recycling • Non-availability of Ready Disposal Channel Like PDS • No Export Avenues Available As International Prices Are Lower

13. Scenario for PSS During Kharif 04 • Inter-state Kharif Conference Organised by Nafed on 16-9-04 for Assessment • Prices Likely to Rule Above MSP • No Crop Likely to Come Under PSS Except Urad in Eastern Region • GOI Revised Tariff Value On Import of Edible Oils, Oilseeds Market May Ease • Nafed Through Its State Agencies Will Monitor Price Situation To Enter for Procurement under PSS if Warranted

14. THANK YOU