MSP (Minimum Support Price) is not a new concept in India. It is rooted in 1964-65. Government formed a committee for looking price policy for 1964. No doubt, there was a huge demand for the time.
Imports of food grains, lower yield, migration of agrarian society, unstable market force necessitate this change. It was welcomed heartily in everywhere.
This committee was popularly known as ‘Agricultural Price Commission’ in 1965 and again renamed as renamed as Commission for Agricultural Costs and Prices (CACP) in 1985 and many more reformation like application of modern inputs like high yielding varieties of seed, chemical fertilizers and mechanization of agricultural process.
MSP was aimed to:
- Assurance for stable pricing for farmers mitigating the influence of market forces and natural calamities.
- Assurance an availability of food grains and improving economic access of food to people.
- Evolving a production pattern in line with whole needs of the economy.
Therefore, the provision of Minimum Support Prices (MSP) was initiated during the mid-1960s to create a sustainable environment for the producers of major food crops, which were seen to possess vast potential for raising grain production. Presently, 24 major crops are covered under the minimum support price program.
Kharif Crops
1. Paddy
2. Jowar
3. Bajra
4. Maize
5. Ragi
6. Tur (Arhar)
7. Moong
8. Urad
9. Cotton
10. Groundnut
11. Sunf lower Seed
12. Soyabeen Black
13. Sesamum
14. Nigerseed
Rabi Crops
15. Wheat
16. Barley
17. Gram
18. Masur (Lentil)
19. Rapeseed/Mustard
20. Saf f lower
21. Toria
Other Crops
22. Copra
23. De-Husked Coconut
24. Jute
25. Sugarcane
Major states Procuring Rice and Wheat
| Rice | Wheat |
| West Bengal | Punjab |
| Tamil Nadu | Haryana |
| Orissa | Uttar Pradesh |
| Madhya Pradesh | Rajasthan |
| Karnataka | Madhya Pradesh |
The policy led both positive and negative consequences. The policy has had a positive impact on farm income, mainly in irrigated area, also proved to be a barrier in the storm of scarcity in food and the other purpose of MSP was to maintain price stability in market.
However, an adverse impact has been in force. It was highly perceived to favor irrigated area of few states domination in wheat and rice production. On other hand, an adverse impact on producers in producing coarse cereals, pulses, oilseeds and other crops was perceived. It led a massive scarcity in pulses and edible oils in countries. Now country has to rely on about one-tenth of its demand for pulses and about half of the demand for edible oil from imports. These changes initiate a review of the role and relevance of MSP in the country.
One of the studies reveals that wheat and rice got the best price among others, it unintentionally to discourage other farmers producing coarse cereal and pulses. There are some other certain factors, which is required through review system i.e. formulation and implementation policies, distribution channels, coordination among the institutions and undue dependence on the state.
The role of agricultural policy for agrarian economy like India has been always an interesting phenomenon in world community. During 1980-85, the import of wheat and rice had come down drastically while coarse cereal production decreased at massive rate i.e. from 43 % to 18 %.
Sachin Raj Singh Chauhan
Chief Sub Editor, Ground Report India Group