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LATEST NEWS UPDATES | How important is MSP-based procurement -CP Chandrasekhar and Jayati Ghosh

How important is MSP-based procurement -CP Chandrasekhar and Jayati Ghosh

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published Published on Sep 22, 2021   modified Modified on Oct 1, 2021

-NetworkIdeas.org

Though not featuring in any of the three farm laws, the Minimum Support Price (MSP) at which the government promises to procure 25 different commodities through different agencies, is a central issue in the standoff between the government and protesting farmers. The latter fear that the implementation of the three laws will end the MSP regime, with the government withdrawing from procuring output at a remunerative cost-plus price. The response of the government and advocates of reform has been that sale at the MSP is resorted to or available only to a few farmers. That opportunity, it is argued, would continue to exist under the new regime, which would also offer alternative, lucrative marketing opportunities for farmers.

The notion that only a few farmers avail of the MSP when marketing their produce has been in circulation for some time, strengthened by the assertion of the Shanta Kumar Committee that only a “miniscule of agricultural households in the country” benefit from procurement. That conclusion was based on the evidence from the National Sample Survey’s Situation Assessment of Agricultural Households of 2013 that only 6 per cent of agricultural households recorded sales of paddy and wheat at the MSP. Besides the fact that there are many other crops that have seen increasing procurement by government agencies, this assertion was misleading because it referred to an average across the country, whereas the figure in states where procurement had been implemented well touched much higher levels.

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NetworkIdeas.org, 22 September, 2021, https://www.networkideas.org/featured-articles/2021/09/how-important-is-msp-based-procurement/?fbclid=IwAR1AcWY9SfmzkofCOKOINUTlOQzv_p4wbY4EGvRWBefkNYul-Rroiwum-1M


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