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Day 14 – Q 2.How far the Minimum Support Price (MSP) scheme has addressed agrarian distress in India? What other measures need immediate rollout for effective mitigation of agrarian distress? Suggest.

2. How far the Minimum Support Price (MSP) scheme has addressed agrarian distress in India? What other measures need immediate rollout for effective mitigation of agrarian distress? Suggest. 

न्यूनतम समर्थन मूल्य (MSP) योजना ने भारत में कृषि संकट को कैसे दूर किया है? कृषि संकट के प्रभावी शमन के लिए अन्य उपायों की तत्काल आवश्यकता क्या है? सुझाव दें।


Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices. The Government of India announces them at the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP) for 23 crops.


Success of Minimum Support Price:

  • From a situation of massive shortages, India has emerged as a grain surplus country.
  • Food security has been achieved at national level.
  • There has been an increase in production of grains especially in cereals.
  • Food prices have remained stable.
  • Increase in argicultural income of farmers.
  • Economic transformation in well irrigated regions of Punjab, Haryana, Maharashtra, etc.,

However, there have been certain issues which have hampered the success of MSP such as:

  • Poor Awareness: NITI Aayog found that only a low proportion of farmers (10%) was aware of MSPs before the sowing season. 62% of the farmers were informed of MSPs after sowing their crops.
  • Non remunerative Price: It was found in many States that farmers were unable to get cost of cultivation from MSP announced by the government.
  • Distorted Cropping Pattern: MSP has put excessive focus on Wheat, Rice and Sugarcane in the procurement at the expense of pulses, oilseeds, coarse grains etc., which has resulted in depletion of water resources, soil degradation and deterioration in water quality in some
    states, especially in the north-western region.
  • Regional Discrimination: It has discriminated against eastern states where procurement at the MSP is minimal or non-existent.
  •  Fiscal Cost: Subsidy burden of MSP has substantial bearing on Fiscal health and inflationary trend in economy. A recent hike in MSP has also raised question about India subsidy limit defined by WTO.

Other measures which need immediate roll out for effective mitigation of agrarian distress:

The Swaminathan commission had recommended several path-breaking measures to resolve agrarian distress in India. These recommendations are of a more vital nature and in all likelihood will provide a long-term solution to the agrarian crisis and farmers distress.

Some of the recommendation are:

  • Effective implementation of land reforms
  • Proper irrigation facilities in rain fed areas.
  • Increasing productivity of farms
  • Technological advancement
  • Improve opportunities for assured and remunerative marketing.
  • Manufacturing sector must absorb excess labour force from the agriculture sector
  • Public investment in agriculture infrastructure
  • Promotion of rural nonfarm sectors


The most important goal of any long-term agriculture development policy in India should be to promote agriculture growth along with regional equity and natural resource sustainability. The regional equity and resource sustainability is a precondition for achieving nutritional security and balanced production. The Government must therefore look into the issues of MSP for their appropriate redressal.

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