Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA), 2018: A Critical Assessment of MSP Procurement 

Policy Update
Neha Kumari

Background

The Minimum Support Price (MSP) is a government-announced price at which certain crops are purchased from farmers. It was introduced to protect farmers from sharp price falls during harvest seasons and to ensure them a minimum income. The government announces MSP for 22 mandated agricultural crops every year, based on recommendations from the Commission for Agricultural Costs and Prices (CACP). Sugarcane is not covered under the MSP system; it has a separate Fair and Remunerative Price (FRP) regime (Ministry of Agriculture and Farmers Welfare, 2025). 

At the same time, an MSP announcement does not guarantee that farmers will realise that price. Its effectiveness as a price-protection mechanism depends on procurement or an operational price-deficiency payment mechanism. In practice, procurement has been concentrated mainly in rice and wheat, while many other crops see limited or no procurement despite MSP being announced (CACP, 2025). This creates a gap between policy intent and farmer reality. 

Historically, Indian farmers have faced price crashes during bumper harvests, leading to distress selling. This is especially true for pulses, oilseeds and other non-cereal crops where procurement infrastructure is weak. To address this, the Government of India launched the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) in September 2018 (PIB, 2024). The scheme aims to strengthen MSP implementation and ensure remunerative prices for farmers growing pulses, oilseeds and copra.

PM-AASHA has evolved over time. Initially, it focused on physical procurement through central agencies. Later, it introduced price-deficiency payment mechanisms to reduce the need for large-scale storage and logistics. The current policy framework allows states to choose between physical procurement and direct payments, with enhanced coverage limits from the 2024-25 procurement season (PIB, 2026).

The central policy question remains: does PM-AASHA adequately bridge the gap between MSP announcements and actual price protection for farmers? While procurement has increased in volume and value, the extent to which small and marginal farmers across different regions benefit remains uneven (PRS India, 2026). This article examines this gap between policy design and farmer reality.

Functioning of PM-AASHA

PM-AASHA is an integrated scheme with multiple components designed to provide price support to farmers. The scheme is implemented by the Ministry of Agriculture and Farmers Welfare, with central agencies such as the National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) and National Cooperative Consumers’ Federation of India Ltd (NCCF) carrying out procurement operations at the request of state governments (Ministry of Agriculture and Farmers Welfare, 2025).

• Price Support Scheme (PSS) is the main procurement component. Under PSS, central agencies purchase pulses, oilseeds and copra at MSP when market prices fall below the announced MSP during harvest. Procurement is carried out only in states that request it, and only registered farmers with valid land records are eligible. From the 2024-25 procurement season, states can procure up to 25 per cent of their production under PSS, while procurement beyond this limit requires approval under the scheme’s prescribed conditions. For Tur, Urad and Masur, procurement up to 100 per cent of state production is allowed to reduce import dependence (PIB, 2026).
• Price Deficiency Payment Scheme (PDPS) offers an alternative to physical procurement. Under PDPS, farmers sell their produce in notified markets at prevailing prices. If the market price is below MSP, the government pays the difference directly into the farmer’s bank account. This payment is capped at 15 per cent of the MSP value and is mainly used for oilseeds (PIB, 2024). The coverage under PDPS has been enhanced from 25 per cent to 40 per cent of state production of oilseeds, and the implementation period has been extended from three to four months (PMO, 2024).
• Market Intervention Scheme (MIS) is activated for perishable horticultural and agricultural commodities when prices drop by at least 10 per cent compared to the previous normal season. MIS operates through cost-sharing between the Centre and states for operations undertaken by central nodal agencies (Vajiram and Ravi, 2026).

PM-AASHA is different from simply announcing MSP because it provides an operational mechanism for price protection. Yet, its implementation depends on state participation, procurement infrastructure, and farmer registration. The scheme does not cover all 22 MSP crops equally, and procurement remains concentrated in certain states and crops (CACP, 2025).

Performance 

Assessing the broader MSP procurement context alongside PM-AASHA requires looking at actual procurement data, beneficiary numbers and government expenditure. 

Total procurement of food grains increased from 761.40 LMT in 2014-15 to 1,175 LMT in 2024-25 (July to June), with MSP value increasing from ₹1.06 lakh crore to ₹3.33 lakh crore over the same period (PIB, 2026). In 2024-25, procurement reached 1,223 LMT with an MSP value of ₹3.47 lakh crore, benefiting 1.84 crore farmers (Ministry of Agriculture and Farmers Welfare, 2025).

For pulses specifically, procurement under PSS increased from 1.52 LMT during 2009-14 to 82.98 LMT during 2020-25, representing a 7,350 per cent increase (PIB, 2025). However, actual procurement of pulses and oilseeds under PSS has remained less than sanctioned quantities due to inadequate storage, insufficient procurement centres, delays in starting operations and quality issues (CACP, 2025).

Since 2018-19, PM-AASHA has covered 99 lakh farmers through procurement of 195 LMT of pulses, oilseeds and copra (PRS India, 2026). During the Rabi Marketing Season 2025-26, 300.35 LMT of wheat was procured, benefiting 25.13 lakh farmers. During KMS 2024-25, 832.17 LMT of paddy was procured, benefiting 118.59 lakh farmers (PIB, 2025).

PDPS performance is harder to assess from available data. The scheme has been implemented mainly for oilseeds, with coverage enhanced to 40 per cent of state production from 2024-25 (PIB, 2026). However, detailed state-wise data on PDPS beneficiaries and payments is not consistently reported in public sources.

The performance of PM-AASHA becomes clearer when the announced MSP is compared with the price farmers are actually able to realise. An MSP can provide effective protection only when farmers have access to procurement or an operational price-deficiency mechanism. In practice, differences in crop coverage, procurement infrastructure, state participation, market access and transaction costs mean that farmers in different crops and regions may receive different prices even when the same MSP is announced.

The following table shows how these policy provisions translate into actual access to MSP and the gap between the announced price and the price farmers may realise.

The available data shows that procurement has increased in volume and value, and more farmers are benefiting. However, the available data does not show how many farmers outside procurement channels are able to realise MSP through private markets, or how many are forced to sell below MSP. This makes it difficult to measure the full gap between the announced MSP and the price actually realised by farmers. Procurement also remains concentrated in rice and wheat, while pulses and oilseeds continue to see limited procurement relative to their production (CACP, 2025). 

Impact 

The impact of PM-AASHA on farmers and agricultural markets can be assessed across several dimensions.

• Farmer income protection: MSP procurement has provided income support to farmers, with MSP payments for paddy (₹14.16 lakh crore) and wheat (₹6.04 lakh crore) alone exceeding ₹20 lakh crore since 2014 (DD News, 2026). However, only about 1.84 crore farmers benefited from MSP procurement in 2024-25, out of roughly 14 crore farming families (India Today, 2026). This means that a large majority of farmers do not directly receive MSP benefits through procurement.
• Distress selling: PM-AASHA can help reduce distress selling in crops where procurement is active. For example, summer moong procurement in Madhya Pradesh reached a record 5.33 LMT in 2026, with an MSP of ₹8,780 per quintal (The Hindu Business Line, 2026). However, distress selling continues in regions and crops where procurement infrastructure is weak or absent (CACP, 2025).
• Price stability: Public procurement at MSP has helped stabilise prices for rice and wheat and, to some extent, for pulses. However, market prices for many crops remain below MSP, especially in states with limited procurement (CACP, 2025). PDPS provides partial price protection for oilseeds, but the payment is capped at 15 per cent of MSP, which may not fully compensate for price gaps (PIB, 2024).
• Farmer bargaining power: MSP procurement has strengthened farmer bargaining power in states with active procurement operations. Farmers can negotiate better prices in private markets when they have the option to sell to government agencies (Ministry of Agriculture and Farmers Welfare, 2025). However, this benefit is limited to regions where procurement centres are accessible.
• Crop production decisions: MSP and procurement have influenced crop choices, with farmers in procurement-heavy states favouring rice and wheat. This has contributed to crop diversification concerns, as pulses and oilseeds receive less procurement attention despite policy emphasis (CACP, 2025). PM-AASHA’s focus on pulses and oilseeds aims to address this, but implementation remains uneven.
• Agricultural markets: PM-AASHA has created a structured market for pulses and oilseeds through central agencies. However, the scheme’s impact on overall agricultural markets is limited by its coverage and the voluntary nature of state participation (Press Information Bureau, 2026).
• Small and marginal farmers: Small and marginal farmers face greater challenges in accessing procurement centres due to distance, documentation requirements and lack of awareness. Transaction costs such as transportation, loading, waiting time and other market-related expenses can also affect the price actually realised by farmers. A farmer may technically have access to MSP procurement but may still choose to sell to a private trader if the net price received after these costs is higher. Therefore, physical access to a procurement centre does not always mean that MSP is the most attractive option for the farmer (CACP, 2025). 
• Regional inequalities: Procurement is heavily concentrated in a few states, creating regional inequalities in MSP benefits. States like Punjab and Haryana see high procurement, while eastern and southern states have lower procurement despite significant production (CACP, 2025). This perpetuates regional disparities in farmer income support.

To what extent does PM-AASHA convert MSP from an announced benchmark into an actual price-protection mechanism for farmers? The answer is partial. PM-AASHA has strengthened procurement mechanisms and expanded coverage, but it has not yet achieved universal price protection across all crops and regions.

Emerging Issues

Several evidence-based challenges limit PM-AASHA’s effectiveness.

• Limited procurement coverage: Despite enhanced limits, actual procurement of pulses and oilseeds remains less than sanctioned quantities due to infrastructure constraints (CACP, 2025). Only about 13-14 per cent of farming families receive MSP benefits through procurement (India Today, 2026).
• Regional concentration of procurement: Regional concentration of procurement is influenced by several factors. First, states with better-developed procurement infrastructure, including procurement centres, storage facilities and mandi networks, are better positioned to conduct large-scale procurement. Second, PM-AASHA depends partly on state participation, so differences in the willingness and capacity of state governments to request and implement procurement affect coverage. Third, crop composition matters because states with large production of crops targeted under procurement are more likely to see higher procurement volumes. Finally, differences in APMC/mandi infrastructure and market connectivity affect farmers’ ability to bring their produce to government procurement centres. These factors together help explain why procurement remains concentrated in some states while farmers in other major producing states have greater dependence on private markets (CACP, 2025). 
• Crop-wise Differences and Diversification: Procurement remains much stronger for rice and wheat than for pulses and oilseeds, even though PM-AASHA specifically seeks to strengthen price support for the latter. This difference affects farmers’ production decisions because a crop with more reliable procurement provides greater certainty about the price that can be realised. Continued concentration of procurement in rice and wheat can therefore discourage diversification towards pulses and oilseeds. PM-AASHA’s focus on Tur, Urad, Masur and other pulses is intended to address this imbalance, but its success depends on actual procurement and market access rather than MSP announcements alone (CACP, 2025; PIB, 2026). 
• Access problems for small and marginal farmers: Small farmers face challenges in accessing procurement centres due to distance, documentation requirements and lack of awareness (CACP, 2025). Registration with land records may exclude tenant farmers and sharecroppers.
• Procurement Infrastructure and Storage Logistics: Inadequate procurement centres, storage and warehousing facilities, along with delays in starting procurement operations, limit the ability of agencies to purchase larger quantities of pulses and oilseeds. Physical procurement also requires transportation, handling and storage capacity. Where these facilities are insufficient, procurement may remain below sanctioned limits and farmers may be forced to sell through private channels. Expanding storage and procurement infrastructure in major production areas is therefore necessary to improve the effectiveness of PM-AASHA (CACP, 2025).
• Awareness and registration issues: Many farmers may not be aware of PM-AASHA provisions or may find the registration process difficult. This limits scheme uptake, especially among small and marginal farmers (CACP, 2025).
• Fiscal sustainability: MSP procurement requires significant government expenditure, with MSP value reaching ₹3.47 lakh crore in 2024-25 (Ministry of Agriculture and Farmers Welfare, 2025). Expanding procurement to more crops and regions will increase fiscal burden.
• MSP-market price gaps: Market prices for many crops remain below MSP, and PDPS covers only up to 15 per cent of the gap (PIB, 2024). This leaves farmers exposed to price risks.
• Centre-state implementation coordination: PM-AASHA implementation depends on state participation, which varies across states (CACP, 2025). Better coordination is needed to ensure uniform implementation.

Way Forward

Based on the analysis, the following policy recommendations are proposed:

• Decentralised procurement: Expand procurement operations to more states, especially major producing states with low procurement, such as West Bengal, Uttar Pradesh, Tamil Nadu, Karnataka, Bihar and Assam (CACP, 2025). State governments should be encouraged to set up more procurement centres and request central agency support.
• Expansion of procurement infrastructure: Invest in storage and warehousing facilities for pulses and oilseeds to enable larger procurement under PSS (CACP, 2025). This includes building godowns, cold storage and processing facilities in production clusters.
• Better access for small and marginal farmers: Simplify registration processes and allow alternative documentation for landless and tenant farmers. Mobile procurement units can reach remote areas where procurement centres are not accessible (CACP, 2025).
• Stronger digital registration and payment systems: Improve digital platforms for farmer registration, procurement tracking and direct benefit transfers. Real-time monitoring can help identify gaps in procurement coverage and payment delays (PRS India, 2026).
• Improved procurement of pulses and oilseeds: Prioritise procurement of Tur, Urad, Masur and other pulses where India has high import dependence. The 100 per cent procurement limit for these crops should be fully utilised (PIB, 2026).
• Better Centre-state coordination: Establish regular coordination mechanisms between the Ministry of Agriculture, state agriculture departments and procurement agencies to ensure uniform implementation (CACP, 2025). States should be provided with technical and financial support for procurement operations.
• Greater transparency in procurement data: Publish state-wise, crop-wise and farmer-category-wise procurement data regularly to enable better monitoring and accountability (PRS India, 2026). This will help identify gaps and track progress.
• Integration with agricultural diversification: Link PM-AASHA procurement with crop diversification programmes to encourage farmers to shift from water-intensive crops to pulses and oilseeds (CACP, 2025). This can be done through targeted procurement incentives and extension support.

Conclusion

PM-AASHA represents an important effort to strengthen MSP implementation and provide price protection to farmers growing pulses, oilseeds and copra. The scheme has expanded procurement volumes, increased MSP payments and benefited more farmers over time. However, the effectiveness of PM-AASHA depends not only on MSP announcements but also on actual procurement, accessibility, timely payments, geographical coverage and institutional capacity.

The evidence shows that procurement remains concentrated in rice and wheat, with limited coverage for pulses and oilseeds despite policy emphasis. Regional inequalities persist, with a few states accounting for most procurement. Small and marginal farmers face access challenges, and infrastructure constraints limit procurement effectiveness.

PM-AASHA has partially bridged the gap between MSP policy and farmer reality, but significant work remains. To achieve universal price protection, the scheme needs stronger procurement infrastructure, better centre-state coordination, expanded coverage to more crops and regions, and improved access for small farmers. The transition from MSP announcements to actual price protection will be critical for making Indian agriculture more sustainable and equitable.

References

Commission for Agricultural Costs and Prices. (2025). Price Policy for Kharif Crops: Marketing Season 2025-26. Ministry of Agriculture and Farmers Welfare. https://www.scribd.com/document/873548581/CACP-Recommendations-2025-26

DD News. (2026, August 4). Year-ender 2025: India’s agricultural sector – Growth, governance and ground-level impact. https://ddnews.gov.in/en/year-ender-2025-indias-agricultural-sector-growth-governance-and-grounder-level-impact/

India Today. (2026, February 16). Record MSP procurement: How many farmers are actually benefiting? https://www.indiatoday.in/business/story/record-msp-procurement-how-many-farmers-are-actually-benefiting-2869087-2026-02-16

Ministry of Agriculture and Farmers Welfare. (2025, November 20). Government Strengthens Farmer Income Support Through MSP and Procurement (PIB Press Release, PRID: 2204754). https://www.pib.gov.in/PressReleasePage.aspx?PRID=2204754

Press Information Bureau. (2024, September 18). Cabinet approves continuation of schemes of Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA). Prime Minister’s Office. https://www.pmindia.gov.in/en/news_updates/cabinet-approves-continuation-of-schemes-of-pradhan-mantri-annadata-aay-sanrakshan-abhiyan-pm-aasha/

Press Information Bureau. (2025, November 20). Increase in the Minimum Support Prices (PIB Press Release, PRID: 2200996). https://www.pib.gov.in/PressReleasePage.aspx?PRID=2200996

Press Information Bureau. (2025, November 20). Empowering India’s Annadatas (PIB Press Release, PRID: 2269182). https://www.pib.gov.in/PressReleasePage.aspx?PRID=2269182

Press Information Bureau. (2026, August 21). Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) (PIB Press Release, PRID: 2301814). https://www.pib.gov.in/PressReleaseDetail.aspx?PRID=2301814

PRS India. (2026, August 26). Demand for Grants 2026-27 Analysis: Agriculture and Farmers’ Welfare. https://prsindia.org/budgets/parliament/demand-for-grants-2026-27-analysis-agriculture-and-farmers-welfare

The Hindu Business Line. (2026, August 28). Summer moong procurement in Madhya Pradesh touches a record 5.33 lakh tonnes this year. https://www.thehindubusinessline.com/economy/agri-business/summer-moong-procurement-in-madhya-pradesh-touches-a-record-533-lakh-tonnes-this-year/article71399139.ece

Vajiram and Ravi. (2026, August 22). Pradhan Mantri Annadata Aay Sanrakshan Abhiyan. https://vajiramandravi.com/current-affairs/pradhan-mantri-annadata-aay-sanrakshan-abhiyan-pm-aasha/

About the Contributor

Neha Kumari is a Research and Editorial Intern at IMPRI, currently pursuing an M.A. in Defence and Strategic Studies at the Central University of Gujarat. She holds an undergraduate degree in Social Management. Her research interests include geopolitics, national security, international relations, governance, and public policy. She is particularly interested in contemporary security challenges and India’s foreign policy, especially in the context of India’s evolving regional and global role. 

Acknowledgement

I would like to express my sincere gratitude to IMPRI for providing me the opportunity to prepare this article and for fostering a rigorous learning environment that connects research with public policy practice. I also extend my sincere thanks to Sruti Halder and Sneha Kohli for their valuable feedback.

Published by: Aastha Banga

Disclaimer

All views expressed in the article belong solely to the author and do not necessarily represent the views or policies of the organisation. 

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