MP Farmers Demand MSP as Entitlement, But Economists Say Focus Should Be on Income Support

Madhya Pradesh farmers have secured a 60% procurement guarantee from their state government for summer moong crops, up from 25%, amidst concerns over the minimum support price (MSP). The current MSP stands at Rs 8,768 per quintal, but wholesale prices in mandis are around Rs 7,000. This disparity is particularly harsh on farmers who exceed the state's average yield of 1.2 quintals per acre, as they lose out on their extra produce sold below the MSP.

The MP government has also raised the procurement limit to 3 quintals from 1.2, but this still falls short for many farmers. The issue extends beyond traditional crops like rice and wheat, with farmers cultivating pulses and oilseeds demanding a guaranteed MSP. While there is economic justification for such support, it comes at a heavy fiscal cost.

Experts argue that instead of physical procurement or payment of price differences, the government should focus on providing minimum income support (MIP) directly to farmers. This would enable them to produce crops in demand by the market, rather than relying on MSPs and input subsidies. MIP, combined with crop insurance and public investment in agricultural research and rural infrastructure, is seen as a more sustainable solution for Indian agriculture.