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MSP will be justified through price deficiency payment: Ramesh Chand -Prabhudatta Mishra

-The Hindu Business Line

It is needed most, not procurement, says NITI Aayog member

Stressing that there is a need for the continuation of the minimum support price (MSP) scheme for crops, NITI Aayog member Ramesh Chand has said it is time to debate and discuss what should be the “means” to ensure the guaranteed returns to farmers since procurement cannot be the answer.

Addressing a conference on “Getting agriculture markets right”, organised jointly by National Stock Exchange and ICRIER, Chand said: “If you ensure MSP through procurement, certainly it is distortionary as it involves huge costs. The latest estimate is that to give 100 as MSP benefit to a farmer, the government needs to spend 35. Earlier it was 40 and now it has been reduced. Still it is very high.”

Inefficient markets

He also said in some cases, the MSP is justified and needed, particularly when there is volatility in prices and a glut in the market. “I feel what matters is how we give MSP to farmers... MSP has to be there as long as markets are not competitive and efficient. But MSP can be given through means other than procurement,” Chand said.

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