Summary
It consists of four components: the Price Support Scheme (direct buying of crops), the Price Stabilization Fund (creates buffer stocks to control price spikes), the Price Deficiency Payment Scheme (pays farmers the gap between market price and Minimum Support Price), and the Market Intervention Scheme (helps with perishable items when prices fall sharply).
Central agencies such as the National Agricultural Cooperative Marketing Federation of India and the National Cooperative Consumers’ Federation of India carry out procurement, initially up to 25 percent of a state’s production for most crops and up to 100 percent for certain pulses.
When physical purchase is not feasible, eligible farmers receive the price difference directly into their bank accounts, limited to 15 percent of the Minimum Support Price value.
The Price Stabilization Fund builds extra stocks of essential commodities like onions and potatoes during harvest and releases them during shortages to keep consumer prices stable.
Digital reforms—including Aadhaar‑based biometric authentication, the Electronic National Agriculture Market platform, and online procurement portals—make the system more transparent and faster.
Overall, the programme aims to give farmers reliable price assurance, reduce distress sales, and balance the need for stable food prices for consumers.