ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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The Failure of MSP

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In the article “Is MSP a Viable Proposition in Marine Fisheries?” (EPW, 3 November 2018), the authors, Shinoj Parappurathu and C Ramachandran, have rightly pointed out that the minimum support price (MSP) is not a good option for ensuring the fisherfolk’s legitimate claim for fair/remunerative prices. Practically, we have learnt similar lessons from the case of agricultural commodities. The steady ratcheting up of the MSP of agricultural commodities has, in fact, distorted relative prices of agricultural inputs, such as land, by distorting both the pattern of use and the level consumption.

Moreover, while MSPs have gone up substantially, farmers’ awareness about these support prices remains abysmal. Data from the Situation Assessment Survey of Agricultural Households, National Sample Survey Office (NSSO) 70th round, revealed that only one-fifth of our farmers knew about the MSP, and even a tenth of those who knew about it had no idea from whom and where the procurement at MSP took place. Incidences of middlemen purchasing foodgrains from the poor and marginal farmers residing in far-flung villages at a price much lower than the MSP and then selling the grains to the procuring centres at the MSP, are not unusual in this country.

While MSP is being sold as a silver bullet for India’s agrarian distress, data indicate that the rise in MSP has neither widened the access of the poor to food, nor alleviated the suffering of poor and smallholder farmers. Market intervention through an instrument like MSP is not the ideal strategy. Rather, fixing of prices on a daily basis, as proposed in the article, could be a better option, only if effective supervision, to ensure the implementation of the prices fixed by the relevant authority, is in place.

Jaydev Jana

Kolkata

Updated On : 30th Nov, 2018

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