Improving competitiveness: MSP benefits continue to remain concentrated

What India needs is to incentivise private procurement, promote crop diversification, and focus on agricultural research

Minimum support price (MSP) has been an integral part of India’s agricultural policy. While it is driven by a well-intentioned effort to ensure food security and safeguard farmers from price risks, it has also had unintended consequences such as less than desired crop diversification and environmental degradation in some parts of the country. While there is a need to boost farm income, a legally enforced MSP, which some farm groups are demanding, may not be the best solution. This may disrupt price discovery and skew production further, among other consequences. Besides, it is not an effective measure to protect farm