DMPQ-Discuss the significance of Minimum support price (MSP) in transforming Indian Agriculture.

The ongoing struggle of farmers is not for political power. It is a struggle to transform Indian agriculture and the livelihoods of the farming majority which are in ruins in most parts of the country. The compulsion of our time is to give a new direction to a peaceful peoples’ movement to generate momentum in small peasant agriculture, which in turn could give real content to our democracy. Setting aside false promises, Author propose a different way of designing a minimum support price (MSP).

MSP has to be conceived as a list of some 23 crops with a more flexible arrangement. 2. Each crop within a band of maximum and a minimum price depending on harvest conditions (i.e. higher price in a bad and lower price in a good harvest year in general) will have its price set in the band. 3. The price of some selected coarse grains can be fixed at the upper end of its band to encourage their production in rain fed areas. 4. In this way, the objectives of income support to farmers, price stabilisation and food security and inducing more climate-friendly cropping patterns can be combined to an extent.

Wide coverage of MSP through income support to farmers would generate massive positive economic externalities through raising industrial demand especially for the unorganised sector. 6. This will help in extending solidarity among farmers and non-farmers while creating a chain reaction of demand expansion through multipliers for the whole economy. 7. For estimating the additional cost of a wider MSP; of the total grains produced some 45%- 50% is for farmers’ self-consumption and the rest is marketed surplus.

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