{"id":27564,"date":"2024-02-16T06:35:05","date_gmt":"2024-02-16T06:35:05","guid":{"rendered":"https:\/\/edukemy.com\/blog\/?p=27564"},"modified":"2024-02-16T06:35:07","modified_gmt":"2024-02-16T06:35:07","slug":"upsc-mains-how-does-the-minimum-support-price-msp-contribute-to-creating-a-remunerative-and-relatively-stable-pricing-environment-for-farmers-aligning-with-the-objective-of-doubling-farmers-inc","status":"publish","type":"post","link":"https:\/\/edukemy.com\/blog\/upsc-mains-how-does-the-minimum-support-price-msp-contribute-to-creating-a-remunerative-and-relatively-stable-pricing-environment-for-farmers-aligning-with-the-objective-of-doubling-farmers-inc\/","title":{"rendered":"UPSC Mains &#8211; How does the Minimum Support Price (MSP) contribute to creating a remunerative and relatively stable pricing environment for farmers, aligning with the objective of doubling farmers&#8217; income? Provide a critical discussion within the specified word limit of 250 words."},"content":{"rendered":"\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/edukemy.com\/refer-and-earn\" target=\"_blank\" rel=\"noreferrer noopener\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1280\" height=\"300\" src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/09\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-10-1.png\" alt=\"\" class=\"wp-image-46428\" srcset=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/09\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-10-1.png 1280w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/09\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-10-1-1170x274.png 1170w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/09\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-10-1-585x137.png 585w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/><\/a><figcaption><a href=\"https:\/\/edukemy.com\/refer-and-earn\" target=\"_blank\" rel=\"noopener\" title=\"\">Refer &amp; Earn NOW<\/a><\/figcaption><\/figure>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_73 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-69d2be980ef4a\" class=\"ez-toc-cssicon-toggle-label\"><p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-cssicon\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d2be980ef4a\"  \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-how-does-the-minimum-support-price-msp-contribute-to-creating-a-remunerative-and-relatively-stable-pricing-environment-for-farmers-aligning-with-the-objective-of-doubling-farmers-inc\/#Introduction\" title=\"Introduction:\">Introduction:<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-how-does-the-minimum-support-price-msp-contribute-to-creating-a-remunerative-and-relatively-stable-pricing-environment-for-farmers-aligning-with-the-objective-of-doubling-farmers-inc\/#Body\" title=\"Body:\">Body:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-how-does-the-minimum-support-price-msp-contribute-to-creating-a-remunerative-and-relatively-stable-pricing-environment-for-farmers-aligning-with-the-objective-of-doubling-farmers-inc\/#MSP_as_a_Remunerative_Tool\" title=\"MSP as a Remunerative Tool:\">MSP as a Remunerative Tool:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-how-does-the-minimum-support-price-msp-contribute-to-creating-a-remunerative-and-relatively-stable-pricing-environment-for-farmers-aligning-with-the-objective-of-doubling-farmers-inc\/#Alignment_with_Economic_Goals\" title=\"Alignment with Economic Goals:\">Alignment with Economic Goals:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-how-does-the-minimum-support-price-msp-contribute-to-creating-a-remunerative-and-relatively-stable-pricing-environment-for-farmers-aligning-with-the-objective-of-doubling-farmers-inc\/#Criticism_Challenges_of_MSP\" title=\"Criticism &amp; Challenges of MSP:\">Criticism &amp; Challenges of MSP:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-how-does-the-minimum-support-price-msp-contribute-to-creating-a-remunerative-and-relatively-stable-pricing-environment-for-farmers-aligning-with-the-objective-of-doubling-farmers-inc\/#Way_Forward\" title=\"Way Forward:\">Way Forward:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-how-does-the-minimum-support-price-msp-contribute-to-creating-a-remunerative-and-relatively-stable-pricing-environment-for-farmers-aligning-with-the-objective-of-doubling-farmers-inc\/#In_case_you_still_have_your_doubts_contact_us_on_9811333901\" title=\"In case you still have your doubts, contact us on 9811333901.&nbsp;\">In case you still have your doubts, contact us on 9811333901.&nbsp;<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-how-does-the-minimum-support-price-msp-contribute-to-creating-a-remunerative-and-relatively-stable-pricing-environment-for-farmers-aligning-with-the-objective-of-doubling-farmers-inc\/#Visit_our_YouTube_Channel_%E2%80%93_here\" title=\"Visit our YouTube Channel \u2013&nbsp;here\">Visit our YouTube Channel \u2013&nbsp;here<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Introduction\"><\/span>Introduction: <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In response to consecutive droughts in 2014-15 and 2015-16, the government aimed to double farmers&#8217; incomes by 2022-23, as outlined by the Ashok Dalwai Committee&#8217;s seven-year plan beginning in 2015-16. Aiming for a 10.4% annual growth rate was considered essential to achieve this ambitious goal.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Body\"><\/span>Body: <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"MSP_as_a_Remunerative_Tool\"><\/span>MSP as a Remunerative Tool:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Income Stability: <\/strong>The Minimum Support Price (MSP) serves as a crucial tool in establishing a minimum price floor, ensuring a guaranteed income for farmers regardless of market fluctuations. By preventing significant drops in agricultural commodity prices, MSP contributes to income stability. <\/li><li><strong>Risk Mitigation:<\/strong> As farmers face various risks such as unpredictable weather and pest infestations, MSP acts as a risk mitigation tool, providing a safety net. <\/li><li><strong>Encouraging Crop Diversification: <\/strong>Attractive MSPs for specific crops, like pulses, incentivize farmers to diversify their cultivation, reducing the risks associated with monoculture. <\/li><li><strong>Investment in Quality Inputs: <\/strong>The assurance of a remunerative price motivates farmers to invest in quality seeds, fertilizers, and technology, thereby enhancing overall productivity. <\/li><li><strong>Government Procurement: <\/strong>Government agencies, such as the Food Corporation of India (FCI), procure rice and wheat directly from farmers at MSP, ensuring a direct market for their produce.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Alignment_with_Economic_Goals\"><\/span>Alignment with Economic Goals:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Doubling Farmers&#8217; Income: <\/strong>The Union Budget allocated over Rs 3.70 lakh crore for various subsidies, including MSP, in the fiscal year 2021-22, highlighting its pivotal role in the economic strategy. <\/li><li><strong>Positive Impact on Income: <\/strong>According to the Situation Assessment Survey (SAS) of agricultural households (2022-2021), the average monthly income of an agricultural household was Rs 10,218, underscoring the economic significance of farming. <\/li><li><strong>Incentive for Crop Diversification:<\/strong> States with a robust MSP system, like Punjab, witness diversification into high-value crops, aligning with the economic goal of doubling income.<\/li><li><strong>Role in Modern Agricultural Practices: <\/strong>Adoption of MSP correlates with technology-intensive agriculture, leading to improved productivity in states like Haryana and Punjab. <\/li><li><strong>Market-Oriented Agriculture: <\/strong>Schemes like the electronic National Agriculture Market (e-NAM) aim to link farmers directly with markets, promoting market-oriented agriculture. <\/li><li><strong>Contributing to Rural Economy: <\/strong>Successful MSP implementation positively impacts rural economic indicators in states like Maharashtra and Haryana, leading to increased income and employment.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Criticism_Challenges_of_MSP\"><\/span>Criticism &amp; Challenges of MSP:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>No MSP for Allied Sector:<\/strong> The absence of MSP for animal husbandry and fisheries hinders income augmentation from these sectors, lacking government procurement. <\/li><li><strong>Demand-Driven Outside APMC Mandis: <\/strong>MSP, being demand-driven, operates largely outside APMC mandis, affecting market dynamics. <\/li><li><strong>Inadequate Storage System:<\/strong> Continuous MSP hikes for grains face challenges due to overflowing government grain stocks, exceeding buffer stocking norms. <\/li><li><strong>MSPs Favouring Paddy and Wheat: <\/strong>Dominance of MSP in rice and wheat production leads to overproduction, discouraging cultivation of crops with higher demand. <\/li><li><strong>Economically Unsustainable:<\/strong> The economic cost of procured rice and wheat exceeds market prices, burdening FCI with an unsustainable economic burden of Rs 3 lakh crore. <\/li><li><strong>Market-Driven Non-Farm Sector: <\/strong>Milk and poultry, lacking MSP, have pricing determined by companies and milk federations, promoting growth compared to grain-dominated sectors. <\/li><li><strong>Export Restrictions: <\/strong>Surplus grains, subsidized due to MSP, face WTO restrictions, resulting in significant wastage annually. <strong>Loopholes in MSP Implementation: <\/strong>The Shanta Kumar Committee reveals that only 6% of MSP reaches farmers, leaving 94% deprived.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Way_Forward\"><\/span>Way Forward:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong> Invest in the Agri-Allied Sector: <\/strong>Prioritize investment in animal husbandry, fisheries, and fruits\/vegetables for a more nutritious and diverse agricultural landscape. <\/li><li><strong>Strengthen FPOs: Enhance Farmer&#8217;s<\/strong> Producer Organisations (FPOs) to bolster farmers&#8217; bargaining power and create a conducive investment climate.<\/li><li><strong>Increase Farmer Awareness:<\/strong> Disseminate information at grassroots levels to empower farmers with knowledge and enhance their bargaining capacity. <\/li><li><strong>Ensure Timely Payments:<\/strong> Address delays in payment to farmers to maintain sustainability in farming, ensuring prompt and remunerative payments.<\/li><li><strong>Promote Irrigation<\/strong>: Invest in irrigation to stabilize state agri-GDP growth, especially in regions with lower irrigation coverage, ensuring a more stable income for farmers.<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-essay?utm_source=Blog&amp;utm_medium=Banner&amp;utm_campaign=Essay\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" data-src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/UPSC-Essay-Course-1280\u00d7300-1-3.svg\" alt=\"\" class=\"wp-image-42688 lazyload\" width=\"781\" height=\"182\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 781px; --smush-placeholder-aspect-ratio: 781\/182;\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"In_case_you_still_have_your_doubts_contact_us_on_9811333901\"><\/span><strong>In case you still have your doubts, contact us on 9811333901.<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>For UPSC Prelims Resources,&nbsp;<a href=\"https:\/\/edukemy.com\/upsc-cse-prelims-resource-centre\" target=\"_blank\" rel=\"noreferrer noopener\">Click here<\/a><\/p>\n\n\n\n<p>For Daily Updates and Study Material:<\/p>\n\n\n\n<p>Join our Telegram Channel \u2013&nbsp;<a href=\"https:\/\/t.me\/WithEdukemy4IAS\" target=\"_blank\" rel=\"noreferrer noopener\">Edukemy for IAS<\/a><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>1. 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