States prefer costly MSP scheme but high cost may deter adoption

Centre will bear a share of expenses and states will have operational freedom

Most states favour a high-cost system for determining minimum support prices (MSPs) for agricultural products. This system, called the market assurance scheme, provides them operational freedom to procure and dispose of commodities, while the Centre bears a share of the expenses.

At present, a high-powered panel of ministers headed by Home Minister Rajnath Singh is trying to finalise the ideal method for determining MSPs.

According to a concept note prepared by the NITI Aayog, the market assurance scheme allows for 100 per cent compensation from the Centre to the states if the loss in procurement and other operations is 25