Minimum Support Price and the Changing Nature of Rural Economy and Its Implications on Agriculture in Haryana

Abstract

Agriculture in India is undergoing a shift. It is due to a grim situation of increasing food production and rural economy linked with agriculture. On one side, agriculture production is led by 55% of cereal crops primarily based on minimum support prices (MSPs) by the Government of India. On the other side, horticulture accounts for only 16% of agriculture without many incentives. The cultivation cost is rising day by day. Unlike employee compensation, the market does not support farmers and their products. Despite rising production, sustainable agricultural growth is unlikely because of issues including groundwater depletion, climate change, and poor income. The MSP is driving the change in farmer’s lives in the changing nature of rural economy. However, the economic conditions of farmers have not changed much as the surveyed households (HHs) revealed based on MSP and its significance on economic condition of farmers. About 60% of farmers claimed that their income remained the same, 22% said that their condition got better, while about 14.43% of HHs claimed that their economic situation got worst. The study highlights that sustainable agriculture and changing nature of the rural economy will transform farmers’ conditions if they diversify the production of crops from cereals to non-cereal crops such as protein-based pulses or less water intensive crops such as millets.