Farmers’ income can be doubled in assured manner by progressive MSP as recommended by Swaminathan Committee.
Before making any conclusion, we first try to answer these Questions:
1. What is MSP and what is its need?
2. How MSP is calculated in India?
3. What are the limitations of MSP in doubling farmers’ income?
4. What are the other alternatives, other than MSP, that can be used to double farmers’ income?
MSP, the Minimum Support Price is the minimum price promised by the government to the farmers.
Need of MSP
1. Minimum income to farmer
2. Food security
1. Agriculture production
2. Rural economic growth
3. Sustainable economic growth
1. Rural-urban divide
2. Rich-poor gap
MSP in India
CACP adopts different methods to calculate MSP. They are
1. 1.A 2 cost
2. 2.A 2 + FL cost
3. 3.C 2 cost
4. C 3 cost
Limitations of present methodology
1. Demand- supply conditions of the market
2. Inter-crop price parity
3. Agriculture – industrial products price parity
4. Price trends in the domestic market
5. Price trends in the international market
6. It fails to analyzes terms of trade
How to double farmers’ income through MSP?
1. Suggestion by Swaminathan Commission should be implemented i.e. government should declare MSP at C 2 + 50%.
2. The price disparity created since independence must be gradually gapped down.
Shortcomings of MSP
3. Retail chain
4. Road & telecom connectivity
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