Budget 2024-25: Allocations for schemes meant to control food prices ramped up

One of the schemes is aimed at curbing the volatility of tomatoes, onions, and potatoes, which have been pricey both this year and in 2023

The Budget 2024-25 presented on Tuesday ramped up allocations for two schemes meant to control food prices and shield farmers’ incomes when markets crash, after funding cuts in previous years. The higher outlays for these programmes, which received only token allocations during some years, come on the back of sticky consumer food prices, which rose 9.6% in June 2024, driven by perishable groceries, the latest official data show.

The budget for the agriculture department has gone up by nearly ₹5000 crore. (PTI)

One of the schemes is aimed at curbing the volatility of tomatoes, onions, and potatoes, which have been pricey both this year and in 2023.

The budget for the agriculture department has gone up by nearly ₹5000 crore largely because ₹6437 crore has been allocated for the PM Aasha (Pradhan Mantri Annadata Aay Sanrakshan Abhiyan) alone. Launched in 2018, PM Aasha, a combination of three sub-schemes, allows state governments to purchase farm produce, such as pulses and oilseeds, when market rates fall below floor prices set by the government, causing losses to growers.

In 2023-24 (revised estimates), the scheme was allotted ₹2200 crore but the budget estimates that year provided just ₹1 lakh, disappointing farmers. In 2022-23, the scheme had zero spending and allocation. The government has also beefed up funds for the consumer affairs ministry’s price stabilisation fund launched in 2014-15, which is meant to curb wild swings in the prices of food commodities, such as tomatoes.

The Budget 2024-24 has made an outlay of ₹10000 crore towards the fund, up from ₹1 lakh during 2023-24 (revised estimates) and a similar amount in 2022-23.

The price stabilisation scheme provides for maintaining strategic buffer stocks of volatile commodities, which are later released in a calibrated manner in markets to moderate price volatility. Under the scheme, direct purchases from farmers are made.

In November 2023, when a price spiral took hold, the consumer affairs ministry urgently needed about ₹5500 crore to make interventions under the price stabilization fund, HT reported that year. The ministry was then relying on “self-proceeds and a revolving fund of ₹250 crore”, an official had said.

Abhishek Agrawal of Comtrade said the funding boost is welcome. “The higher allocation under PM Aasha is also geared towards procurement of pulses and oilseeds at minimum support prices as announced recently.”