ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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A Study of Selected Crops in India

Price Deficiency Payments and Minimum Support Prices

There is an ongoing debate on whether minimum support prices for various agricultural commodities can be replaced by a system of price deficiency payments to farmers. The main objective of the intended policy shift is the improvement in farmers’ incomes as well as a reduction in farm subsidies. An analysis of this system suggests that price deficiency payments might be a better option for both farmers and the government. However, it should be properly designed so that it can improve farm incomes, national food security, fiscal prudence and sustainability of agriculture. Unlike the Price Loss Coverage programme in the United States, covering almost all crops, and the MSP in India covering as many as 23 crops, it should be limited to a few specific commodities. 



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Updated On : 18th May, 2018

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