Implementations of Budget 18-19: Minimum Support Price to Farmers

Implementations of Budget 18-19: Minimum Support Price to Farmers
Current Affairs , by Chiranjibi Chapagain  on : Feb. 5, 2019

Current Affairs

The budget of AY 2018-19 had announced introduction of Minimum support price to the farmers of India. The minimum support price is supposed to cover all the expenses of production of the farmers and provide a 50% margin to the farmers. Basically, MSP would be 150% of the cost of production of the agricultural produce.

MSP or Minimum Support price was introduced with the concept that the farmers should realize at least 50 per cent more than the cost of their produce, in other words, one and a half times of the cost of their production.


The honorable Finance minister quoted:


If price of the agriculture produce market is less than MSP, then in that case Government should purchase either at MSP or work in a manner to provide MSP for the farmers through some other mechanism.


MSP is a sovereign guarantee that the state shall step in as a buyer of the last resort so that farmers get fair returns for their hard work.


Implementation of MSPs:


MSP has been increased for all notified Kharif & Rabi Crops for the season 2018-19 on 4.7.2018 and 3/10/2018 respectively.


In addition, MSP in respect of other commercial crops like Copra (milling) & Jute for the year 2018-19 have also been increased which ensures farmers get at least 50 per cent return over cost of production.


Prospect for future Years:


The concept of MSP is being expanded to the rest of the crops too.


Government has decided to keep MSP for the all unannounced crops of kharif at least at one and half times of their production cost.


Social Impact:


The farmers are greatly benefited by the introduction of MSPs on their products.


The farmers are free to sell their crop for as much as they wish, but should the prices fall below a minimum level, the government is there to help them.


MSP: A feel-good fiction?


Even though the policy of the government to help farmers get a fair price for their produce is remarkable, we can not ignore the actual market situation, ie are farmers indeed getting a fair price for their agricultural produce?


Parliament’s standing committee on agriculture routinely acknowledges and ritually regrets the inability of the vast majority of farmers to realize MSP equivalent prices.


In reality, the on paper price advertised by the government at AGmarket is way to high compared to the actual prices of products being sold on the actual agromarkets and mandis.



So, is MSP really a boon for the farmers or just a feel-good fiction? Leave your thoughts on the comment section.


And if you have any queries on this topic, feel free to ask a question from the left panel of your screen.


Thank You


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