In an attempt to empower small and marginal farmers and break the influence of traders in price determination, the Indian government is working to launch the PM-Kisan Bhai (Bhandaran Incentive) Scheme.

PM-Kisan Bhai Scheme:

• This scheme aims to incentivize farmers to retain their produce for a minimum of three months post-harvest, granting them the autonomy to decide when and where to sell their crops.
• The monopoly of traders in price determination goes away. Farmers are more responsible for their produce.
• This initiative grants farmers the autonomy to decide when to sell, in contrast to the current practice where most crops are sold around harvest typically spanning 23 months.

Implementation of the Scheme:

The scheme may be piloted in states such as Andhra Pradesh, Madhya Pradesh, Assam, Rajasthan and Tamil Nadu etc.

Key Components:

• Warehousing Rental Subsidy (WRS): Small farmers and farmer producer organisations (FPOs) can avail of a WRS benefit of Rs 4 per quintal per month for a maximum of three months, irrespective of warehousing charges.
• Prompt Repayment Incentive (PRI): The government proposes to extend a 3% additional interest subvention under the Kisan Credit Card (KCC) scheme for farmers pledging their produce and obtaining loans at subsidized interest rates.
• The storage incentive will be provided for a maximum of three months. Besides, produce stored for 15 days or less will not be eligible for the subsidy. Incentives will be calculated on day to day basis.

Benefits offered:

• Farmers can now reject the low remunerative prices offered by the traders as they now have monetary support for storage.
• Platforms like the e-National Agriculture Market (e-NAM) will connect farmers to a broader range of buyers across the country.

Although financial support was available to farmers, it's effectiveness is limited due to high carryover costs on farmers and credit risk to bankers.

The scheme aims to incentivize the storage of farmers' produce in scientifically built warehouses reducing interest rates on pledge finance.

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Reference:

• civilsdaily.com
• www.thehindubusinessline.com