Amit Baijnath Garg:
The recent increase in Minimum Support Price (MSP) for six Rabi crops marks the latest step in the central government’s effort to support farmers. The hike, ranging from Rs 130 to Rs 300 per quintal, raises wheat to Rs 2,425 per quintal and boosts rapeseed and mustard by Rs 300. While the government has steadily expanded MSP coverage to include 23 crops, this latest adjustment prompts questions about whether this increase will prevent further agitation or if a permanent solution is necessary.
MSP, introduced in 1967, guarantees farmers a fixed rate for crops, shielding them from market fluctuations. The Commission for Agricultural Costs and Prices (CACP) assesses MSP based on production costs, market trends, and demand-supply conditions, aiming to balance farmer income with consumer prices. However, the demand for a legal MSP guarantee grows louder, with farmers urging the government to extend MSP across all crops. They argue that a legally backed MSP would assure fair returns and naturally encourage crop diversification.
The government asserts that higher MSPs will improve farmer income, yet many farmer leaders remain skeptical. They call for complementary measures, such as a price stability fund to counter market slumps and incentives to diversify beyond rice and wheat into higher-value crops like fruits, vegetables, and livestock. Contract farming, they caution, must protect farmers from potential exploitation by companies, which often lead to contract disputes, debt, and even despair.
Some agricultural experts argue that the overemphasis on MSP may stifle innovation, leading to an unhealthy dependency on government purchases. They suggest that MSP guarantees could inflate crop prices by 25–30%, triggering food inflation and straining the government’s fiscal management. Others believe a comprehensive MSP policy, coupled with market interventions, would enhance food security, control inflation, and shield farmers from exploitation by intermediaries. By stabilizing prices and securing crop demand, MSP would encourage farmers to adopt more efficient, sustainable practices, reducing reliance on water-intensive grain crops.
Studies underscore the economic toll on Indian farmers due to policy-driven price distortions. An ICRIER-OECD study highlights a staggering Rs 45 lakh crore loss over 2000–2017, revealing that policy biases have kept many farmers below the poverty line. While the government procured over 60 million metric tonnes of paddy and 26 million metric tonnes of wheat in 2022–23, challenges remain in procuring crops beyond these staples.
Dr. Virendra Singh Lathar, an agricultural expert, advocates for a legal MSP guarantee, which he argues would reinforce national food security, mitigate inflation, and promote self-sufficiency in oilseeds and pulses. CACP also suggests an MSP policy that encourages protein-rich crop diversification while limiting grain purchases. Experts caution that food security should prioritize national stability and self-sufficiency over imports, which could erode agricultural employment and disrupt rural livelihoods.
In moving forward, the government faces a delicate balance. A thoughtful MSP framework, aligned with crop diversification and sustainable farming practices, could be transformative. This requires a systemic overhaul, empowering farmers, minimizing intermediaries, and ensuring that agricultural policy uplifts those who work the fields. For India’s farmers, the need for a secure, fair, and prosperous future remains as urgent as ever.
Amit Baijnath Garg
International and National Awardee Journalist-Writer
