The minimum support price of crops is a short-term solution for agricultural distress which

creates long-term problems. Examine. Suggest measures to overcome the limitations of the
MSP regime.
The minimum support price is the minimum price level set by the government for the
procurement of agricultural produce directly from the farmers. MSP acts as a floor rate and
provides a sense of security to the farmers in times of distress. It safeguards the farmers
against distress sale and exploitation by market intermediaries. It also helps in providing
food security under the National food security Act, 2013. MSP has been beneficial by
providing a short-term solution but it brings with it several long terms problems like
1. Distortion of cropping pattern- Due to the procurement of wheat and rice at a large
scale by the government, farmers are incentivized to focus only on wheat and rice.
Continuous rotation of wheat and rice decreases the soil quality. These crops being
water-intensive also affect the water table.
2. Regional imbalance- The benefit of MSP is concentrated mainly in a few states like
Punjab, Haryana, Madhya Pradesh and eastern states remain mostly untouched.
More than 40% of wheat procurement and 25% of paddy procurement takes place in
Punjab and Haryana.
3. Limited reach- The ineffective implementation of the facility can be understood by a
report by the Shanta Kumar Committee which states that only 6% of the total farmers
are getting the benefit of the MSP.
4. Insufficient remuneration- Many people argue that although the price is revised every
season, it is not proportional to the input cost increase. Also, there has been
dissatisfaction with the method of calculation which is currently 1.5 times A2+FL
which is less than that of C2+50% as suggested by the Swaminathan committee.
Measures to overcome the long-term problems caused by MSP.
1. Crop diversity- Instead of focusing only on two crops, farmers should be incentivized
to diversify their crop pattern by adding legumes, and horticulture crops. This will
help in improving the soil quality as well as the groundwater table.
2. Expanding the reach- The government should work on proper implementation of the
facilities so that it does not get concentrated in a few hands. There should be a
special focus on left-out states and small farmers for better and inclusive growth of
farmers.
3. Capacity building and training- The government should enhance the capability of the
farmers to realize their full potential by skilling, mechanization, and building an
efficient value chain through cluster and FPO formation. The government should also
work on reducing post-harvest losses.
4. Understanding the basic essence of MSP- The basic objective of MSP is to protect
farmers against a fall in the prices of agricultural produce. The government should
intervene when the prices fall below an appropriate level, or it can fill the gap in the
prices through DBT like the Bhavantar Bhugtan Yojana. This will help is establishing s
 system which is partially state-supported and partially market driven so that the
farmers could benefit from the upward movement in the market price.
MSP has been a savior for farmers and has solved various problems but it also has some
challenges associated with it. It is required to adopt appropriate measures to overcome
the limitations and to make it sustainable for long term.