Mains-68: Issues related to Direct and Indirect Farm Subsidies and Minimum Support Prices

How a multi-prolonged strategy can aid in addressing farm distress?

The one fits all approach like farm loan waiver, increasing MSPs and Direct Benefit Transfer (DBT) doesn’t recognize the heterogeneity of farming community. A multi-pronged strategy of income support, government investment, and institutional innovations, and not a one-size-fits-all approach is the need of the hour to address farm distress. Immediate Measures To overcome immediate distress, ..

Why the often adopted go to measure like loan waiver, increasing MSPs and DBT have failed to provide a holistic measure to address farm distress.

The two main policy interventions repeatedly discussed to tackle farmer distress are loan waivers and minimum support prices (MSP). These policy interventions don’t recognize the fact that farmers are a heterogenous community and there is a difference between farmer dissatisfaction and distress. Loan Waiver Even though most economists agree that loan waivers are a bad ..

What are the reasons for viability crisis in agriculture? Explain with special reference to Minimum Support Price Scheme.

There are several reasons that make Indian agriculture less viable including Small and fragmented land-holdings; quality seeds and low seed replacement ratio; fertilizers and irrigation policy; lack of mechanization; issues in marketing, inadequate storage facilties etc. However, MSP scheme is peculiar because its intention is to provide direct support to cultivators. Though government carries out ..


Discuss the recommendations of Ramesh Chand Committee Report of March 2015 with respect to the Minimum Support Price (MSP). Why the government is reluctant to accept these recommendations?

Ramesh Chand committee was set in 2013, to examine the methodological issues in the fixing of MSPs. The committee submitted its report in 2015. Some of the important recommendations of Ramesh Chand committee are: The committee recommended that Commission for Agricultural costs and prices which is now restricted to computing MSPs shall act as a ..

Do you agree with the view that the cash transfers to farmers who sell their produce in the market at below MSP levels can be a better alternative to the procurement under Minimum Support Price scheme? Discuss taking example of the Bhavantar Bhugtan Yojana (price deficit finance scheme) launched in Madhya Pradesh.

Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices. This serves the purpose of protecting farmers from distress sale and procurement of food  for Public distribution system. In price deficit financing system government would pay the farmers the ..