BS EDIT: Reassessing MSP: The Need for Market Reforms in Agriculture

By Business StandardPublished On Mar 12, 2025

MSP—A Double-Edged Sword?

Ensures food security & price stability

Limits crop diversification & strains resources

Limited Outreach of MSP

Only 15% of paddy & 9.6% of wheat farmers benefit from MSP

Small farmers, despite producing ~50% of major crops, lack access

Fiscal & Environmental Burden

High fiscal costs strain government finances

Over-reliance on water-intensive crops harms sustainability

Market-Based Alternatives

Efficient value chains can improve farmer earnings

Price-deficiency payments can mitigate price fluctuations

Challenges of Price-Deficiency Payments

Risk of market price manipulation by traders & farmers

Past experiments, like Bhavantar Bhugtan Yojana, failed

The Path Forward

Encourage private procurement & crop diversification

Invest in R&D & agri-market reforms for long-term growth