A response to the frequently heard criticisms of a law to guarantee minimum support prices for farmers. https://thewire.in/agriculture/busting-the-misconceived-criticisms-around-an-msp-law
The system of Minimum Support Prices (MSP) came into being in the 1960s and was supposed to provide an assurance of minimum remunerative prices to farmers with the promise that the government will purchase any quantity of farm produce that farmers are unable to sell at the minimum prices. However, this promise was never kept, and the system of government procurement was created only for a few crops and functioned only in a few states. This has become a major problem in the recent years as, in any given year, market prices for several crops prevail at levels that is far below the MSP.
The demand for a guarantee of remunerative prices has emerged in this context.
A guarantee of MSP will not benefit the bulk of farmers who have small holdings, often working as farm and non-farm labour.
Guaranteed MSP is not a solution to all problems. But a more remunerative price does create conditions where farmers can pay better wages to farm workers. Remunerative agriculture is critical for the rural economy, including farm workers, and not beneficial only to large farmers. On the other hand, distress among farmers puts downward pressure on wages, depresses rural demand and slows down economic growth.
by Vikas Rawal
19/02/2024