Abstract

For several decades, the Indian government has established a minimum support price (MSP) program for agricultural commodities to alleviate farmers’ price risks. Concerns have been expressed regarding the MSP approach, which can potentially disrupt market integration of agricultural commodities, change pricing incentives and alter the resource allocation and production among commodities. This review article addresses the current situation of agricultural commodity support pricing, how it can be more successful and whether it can be guaranteed. Following the Indian government’s decision to repeal the three agricultural legislations, it has become increasingly clear that the MSP system needs a significant revision and that a change in discourse is must. MSP poses serious ramifications for soil health and water levels, particularly in rainfed regions that are quickly being converted to irrigated areas. A course correction is required, beginning with the demand and supply balance, while protecting farmers’ interests through remunerative prices and assistance as and when needed. In addition to the use of data-driven technologies for the digitization of land records, issuing unique farm IDs and cropping system analysis, the necessity of pricing differential schemes in India has been explored.

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