Podcast | Is the steep hike in MSP for kharif crops, a giant leap for the Indian farmer?

What is the MSP hike all about?

A report in News18.com simplifies the answer and explains MSP as a form of market intervention undertaken by the government, to provide a safety net to farmers in case of a price drop during bumper production years. The main purpose seems to be to support the farmers from distress sales and to procure food grains for public distribution. In the event that the market price of a commodity falls below the announced minimum price, government agencies are committed to a purchase the entire quantity offered by the farmers at the announced minimum price. 

We quote from the News18.com article, "MSP is a price for crops that the government guarantees to the farmers at all costs and under all circumstances. According to government policy, a total of 26 commodities/crops are covered under MSP.

This includes 7 cereals (paddy, wheat, barley, jowar, bajra, maize and ragi), 5 pulses (gram, arhar/tur, moong, urad and lentil) 8 oilseeds (groundnut, rapeseed/mustard, toria, soyabean, sunflower seed, sesamum, safflower seed and nigerseed), copra, De-husked coconut, raw cotton, raw jute, sugarcane and VFC tobacco."

The minimum support prices are announced by the Indian government 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).