What purpose MSP for crops?


That the announcement of least assistance price tag (MSP) for numerous crops has develop into a ritualistic physical exercise above the decades has yet once again been confirmed by the latest Cabinet conclusion to hike the MSP for the 2021-22 Kharif season crops.

The certain intent of the price tag hikes and meant outcomes are not distinct. The intention of MSP should to be to deliver a signal to growers that they choose a call on what crop to improve, assure them of a least price tag and stimulate a change from one particular crop to one more exactly where needed.

In India, agriculture is matter to various risks. Crop cultivation is seasonal and regional in mother nature. The output sector tends to be risky. In the course of the harvesting season, make selling prices are likely to collapse. MSP delivers assurance of a least price tag so that the farmer recovers his expense and also receives a decent return on financial commitment.

This writer firmly thinks that MSP must in fact act as a sovereign promise presented by the federal government to farmers that they will not be permitted to endure losses if selling prices slide under the specified assistance price tag. If this is not the case, MSP loses its sanctity.

Importantly, MSP is an possibilities contract exactly where the federal government is the Possibilities vendor and the farmer the Possibilities consumer. In the celebration, the federal government is obliged to obtain from farmers if the price tag falls under MSP but at the exact time, the farmer is below no obligation to market to the federal government if the price tag policies previously mentioned MSP and is absolutely free to market in the open up sector.

Implementation skewed

Implementation of the MSP plan is skewed. Rice and wheat garner all the interest, although other crops, like coarse cereals, oilseeds and pulses, typically languish. If MSP is not backed by a robust nationwide proactive procurement technique, it is doomed to fail in a generation-centric tactic.

Concentrate on rice and wheat has developed its personal financial and ecological issues. As a nation we are unable to any a lot more disregard the ecological catastrophe waiting to happen simply because of grain mono-cropping in the country’s breadbasket and open up-finished procurement.

MSP has to choose into account domestic and worldwide sector problems. Increased MSP is no promise that growers will reward as other attendant policies – exim trade, customs tariff and use – negate the effects. Pulses are a very good example. We try to make a lot more, but do minimal to enhance use.

The case of oilseeds is tragic. As a crop in chronic shorter offer, growers should to reward immensely. However, oilseed selling prices have a lot more typically than not dominated under the specified MSP and has distressed growers. Evidently, the unimaginative trade and tariff plan for vegetable oils negates the intent of higher MSP.

It’s time the silo mentality among the numerous ministries – Agriculture, Foodstuff, Consumer Affairs, Commerce – is changed by a holistic tactic that normally takes a comprehensive view of the agriculture sector, like generation, use and trade.

(The writer is a plan commentator and agribusiness professional. Views are personal)