Table of Contents

This document captures the comments of the 31 participants on the biggest failings of MSP today and the achievable changes suggested by them. As these are comments of different participants, they are not necessarily in alignment with each other.

Current Situation

• Overall stagnation in rural incomes and wages.
• Nutrition is still a challenge in India.
• Need to distinguish between MSP and procurement regime.
• The state is supporting a practice where yields, incomes do not improve apart from higher commodity prices.

Challenges and failings of MSP today

Policy Design

• MSP was started to enhance production and moved to support income, but the implementation hasn’t changed.
• States announcing bonuses on central MSP doesn’t work because the Central government has disincentivized it for states. FCI won’t lift a grain, so states bear the loss and burden for the entire crop.

The uneven spread of MSP

• Crop-wise: More than 80% of MSP is going to wheat and paddy.
• Region: a large part of the procurement operations is concentrated in a few states.
• Land size: Although small and marginal farmers are greater in number, the volume of procurement is more from larger farmers.

Impact of incentives and emerging challenges

• Intensive monoculture of high yielding varieties of paddy and wheat.
• Excess production of rice and wheat, which is not needed; the overflow of buffer stocks.