Fields of concern (Agricultural MSPs in India)

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Fields of concern (Agricultural MSPs in India)

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  • Several hikes: In the first 4 years the Modi Govt. was cautious about increasing the MSP. However 2018 saw generous hikes.     
    1. The highest increase in the Kharif season was 52.5% for the cereal ragi. For the Rabi season the highest increase is 20.6% for Safflower.
    2. The govt. claims that with this increase it has delivered on its promise, as  farmers will get a price at least 150% above their cost of production.
  • Eye on polls?
    1. Rajasthan and MP polls in late 2018 are forcing the BJP to take steps to tackle anti-incumbency.
    2. BJP in MP handled farmers’ agitation badly, and now hopes the MSP increase will improve electoral fortunes.
  • Agrarian distress: The Gandhi Jayanti farmers’ march into Delhi was tackled with force. Causes for the march included lack of adequate prices for output and increase in input costs, leading to distress.
  • MSP does not work:
    1. Except for paddy and wheat, the MSP does not work if the Government does not procure the farm output directly.
    2. Market prices for cotton are close to the MSP because exports are expected to rise due to the US-China trade war.
    3. The price deficiency payment scheme and the private procurement plan are in the beginning stage.
  • Complete reboot needed: The agricultural sector needs a complete reboot. Restrictive trading policies and excessive government interventions need to be dealt with.
  • Summary : Electoral compulsions have forced the govt. to hike the MSPs on Rabi crops too, but without a complete reboot of farm produce procurement and agri-markets, farm distress won’t dissipate quickly.
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PT's IAS Academy: Fields of concern (Agricultural MSPs in India)
Fields of concern (Agricultural MSPs in India)
Excellent study material for all civil services aspirants - begin learning - Kar ke dikhayenge!
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