Minimum Support Price: Significance, and Related Issues

MSP (Minimum Support Price) is the cost to government officials to buy crops from farmers, in order to assure farmers of any significant decline in agricultural income. It has been announced by Government on the basis of the recommendation of the Agricultural Costs and Prices Commission (CACP), at the beginning of the planting season. The key objectives are to assist smallholder farmers from low-income agreements and to obtain grain for export to India. It is an important part of India's agricultural pricing policy. Only 6 percent or less, farmers can sell their produce at a higher cost than the Low Support Price. The MSP framework was established in 1966-67 for wheat and was expanded to include other important food crops and was later given to the poor under the distribution framework under a subsidized amount.

Is MSP Different for Different Regions?

Because of variations in irrigation and wages, the cost of the same yield varies from one region to another. However, there is no downtime in downtime, so there is only one MSP for the whole country.

The Value of Minimum Support Price -

·         Impact on Export - Mountaineering in MSP also has a negative impact on exports by making Indian products less durable especially when world market costs are low.

·         Natural Issue- MSP promotes irrational farming practices in which the soil, water is concerned about a certain level of groundwater depletion and the addition of salt to the soil.

·         Crop Diversification - MSP announced by the Government of India without the 1966-67 example of wheat has reached about 24 plants so far. This has encouraged farmers to develop a variety of crops in order to increase their agricultural income.

·         Independent Consumer Price Limits - MSP conveys a price message to advertise that if retailers do not contribute more than MSP costs the farmer will not be able to sell his product. In this way, it acts as an anchor or benchmark for agricultural products. It ensures that the market cost will not be significantly lower than the Low Support Price.

·         Low Benefits - The benefits of this program do not extend to all farmers and all the crops on the farm. Not all farmers have had the option of receiving MSP benefits due to a lack of awareness of MSP programs. There are as many places in the country as the northeast region where the implementation of MSP programs is a whole week.

·         Fixed Rewards - Farmers have been insured against financial inconsistencies in market sentiment. It provides farmers with protection from crop losses and price uncertainties.

·         Help in Decision Making- MSP is reported at the beginning of the planting season, this helps farmers to decide the best crop to plant. This development data helps the farmer to decide which crop best to plant in order to maximize financial benefits within the limits of agricultural land, environment, and irrigation framework.

·         Consolidating Markets - It drastically alters the unrestricted economy by choosing certain crops rather than a different yield.

·         Fiscal Pressure- Open purchase of paddy and wheat from MSPs is completely out of line with market costs and leads to economic inequality in the economy.

·         Insufficient Storage Area - MSP that does not have sufficient storage capacity has brought a large number of stocks into stocks. Stock is now a double standard under PDS, Buffer stock so there is a need for more storage space for these agricultural products.

·         Various Crops - MSP contributes to plant diversity in India. With MSP planning projects it is influenced as it encourages the construction of MSP raises those plants only as it ensures restoration.

Other MSP Options-

·         Modified Payment Models - Instead of relying solely on MSP, government officials need to investigate potential replacements for farmers.

·         Value Deficiency Payment- To address the issue of MSP, NITI and the Economic Survey propose a Price Deficiency Payment (PDP) in which government officials pay farmers the difference between a modular rate (normal cost at maximum) and a lower Support Value. A few provinces such as Madhya Pradesh (Bhavantar Bhugtan Yojana), the government of Haryana (Bhavantar Bharapai Yojana) have submitted financial plans for shortages.

·         DBT Support- From the cost to support, all details of the market distortion and yield budget can be included in the Pradhan Mantri Kisan Samman Nidhi program or PM-KISAN.

·         Stock Should Be Diversified- The public authority must set aside sufficient amounts of all basic foodstuffs and not just rice and wheat, which enable strong market interventions, with the benefit of unsuspecting consumers to be better managed through designated cash flows.

·         Commercial Crops- MSP is used as a tool to improve the construction of scarce obvious food crops. MSP encourages farmers to develop commercial crops and grow the environment in a commercial way.

·         Purchase Improvement - MSP provides fixed prices in the hands of private investors. It helps to improve the supply chain and revitalize the livelihoods of farmers and their families.Various Problems Related to Low Support Price

·         Unrelated Increment - MSP is not increased in terms of extended creative costs. The MSP has fallen sharply between 2014-2017.