MSP Effect on Price and Arrivals of Major Crops of Madhya Pradesh

Abstract

"To study the effect of MSP on price and arrivals, Madhya Pradesh was purposively chosen with its major crops, paddy, wheat, soybean, bengal gram, and black gram. With the help of data collected from Agmarknet portal for period 2010-2020 study was carried out. The data was analysed by calculating Weighted averages, Percentages along with Linear trend analysis, Tabular analysis, Correlation analysis, and Seemingly Unrelated Regression. The study found that MSP for selected crops had growth rates ranging from 4.5 to 8.2 percent per annum. Share of arrivals sold below MSP ranged from 15 to 68 percent. MSP had positive relationship with price of commodities but had negative relationship with share of arrivals sold below MSP and price difference from MSP. Thus, MSP had negative effect on arrivals and price reported below MSP. So, procurement should be done by the government for the commodities where 50% of the arrivals are sold below MSP. Government should also provide the facilities (grading, processing, storage etc.) that will be helpful for the farmers to sell their commodities at MSP in the market."