Will the MSP increase for kharif crops reduce India’s agrarian distress?
Since the announced MSPs are still 20-25% lower than prevailing wholesale prices for many crops, their impact on farmers' income is uncertain
The much-awaited announcement on minimum support prices (MSPs) for kharif crops has increased the MSP for paddy by ₹ 200 from ₹ 1,550 to ₹ 1,750, a 13% increase. The MSP increase for other crops varies between 3.7% for moong to 45% for nigerseed. But it is paddy where it will matter the most. For most other crops, MSP announcements have little value unless the government also proactively enters the market and procures the produce. This has not been the case so far, with procurement limited to paddy and wheat. Procurement of pulses increased after the collapse of pulse prices in the domestic market last year and the ensuing farmers’ protest in several states. But it has proven insufficient to stop the collapse of pulse prices. The result has been the sharpest decline in pulse acreage despite record procurement.