AA

Aditya AgarwalAIR 1

Question 13Discuss the role of MSP in protecting farmers from sudden price shocks. Consider legalization and other supportive measures.GS3GS2

MSP से उत्पादन उत्पन्न किसानों को आकस्मिक मूल्य शिखरित के आगाम से बचाव हे". क्या आपको लगता है कि MSP को वैधानिक बनाने से किसानों को आकस्मिक आघातों से बचाया जा सकेगा? MSP आधारित लक्ष्य का प्रभावी पक्षन के लिए अन्य कौन से उपाय किए जा सकते हैं? | "The role of MSP is to protect farmers from sudden price shock". Do you think legalization of MSP can insure farmers from sudden price shocks? What are the other measures which can be taken to make MSP-led procurement effective?

Open scan (p.28)

Introduction

MSP – Minimum Support Price is the minimum amount the government pays for the procurement of 22 crops. It has announced.

21 words

Main Body

Benefits of MSP:

Assured farm income
Reduce vulnerabilities from price shocks
Sends signal to the markets regarding prices
Farmers get the knowledge on which crop is to be produced.

Legalization of MSP will lead to:

Legal assurance to farmers to their produce
FCI legally obligated to purchase from farmers.
This will reduce the vulnerabilities of farmers from price shock.

Issues:

Inability of the government to legalize MSP procurement (fiscal and store)
Distorts the market mechanism
Over production of specific crops – market failure
High inflation in other non-legalized MSP crops.

Other Measures that can be taken are:

Income support to farmers by reducing MSP and other price subsidies.
Extension of PM KISAN.
R&D in farming – improve productivity; no major productivity increase since green revolution.
Example: As per Prof. Ashok Gulati – ≈ 1 expenditure in R&D → ≈ 5 output where ≈ 1 expenditure in subsidy → 0.7 output
Shift of workers from agriculture to manufacturing sector – Improve Incomes.
Employee Linked Incentive scheme (ELI) along with PLI aims to achieve this.
Crop diversification and reduction in cultivated crops phenomenon.
Agricultural processing to improve incomes (E.g. Tomato, Onion).
Investment in Storage Infrastructure.
PACS grain storage initiative.
Policy certainty – banning of onion exports, Minimum export prices – hurt farmer income.
Adoption of beekeeping – sweet revolution in augment income

Legalization of MSP – rather than being beneficial will lead to spiraling of issues ranging from market distortion to fiscal deficit. Achieving food and nutritional security requires other measures.

(Continuation of legalization issues and measures)

iv) Difference in MSP and Issue Price

Subsidized by the government for FCI functioning. (Budgetary support).

Reasons for low efficiencies and efficiency:

i) Lack of storage infrastructure to store such large quantities

Leads to wastage of grains

ii) Policy of First-in-First out – requiring large storage infrastructure.

iii) Schemes such as IM Gail Kalyan Anne Yojana burdening FCI finances.

iv) Leakages and corruption – selling of the food grains in export markets – which were marked for PDS.

v) Low technology adoption for efficient transportation and distribution

vi) Central collection instead of decentralized model.

374 words7 paragraphs24 bullet points

Conclusion

Legalization of MSP – rather than being beneficial will lead to spiraling of issues ranging from market distortion to fiscal deficit. Achieving food and nutritional security requires other measures.

29 words

  • Well-structured answer with clear identification of benefits and issues
  • Good use of diagram to show MSP procurement flow
  • Comprehensive coverage of legalization benefits
  • Detailed explanation of issues with MSP legalization
  • Specific examples and data points (e.g., R&D vs subsidy output ratio)
  • Relevant policy suggestions with specific scheme names
  • Detailed identification of specific inefficiencies in system
  • Clear explanation of policy constraints
  • Practical understanding of operational challenges

Topper

Aditya Agarwal

AIR 1

Subject & Paper

GS3GS2

Topic

Government Policies and Interventions for Development

Agricultural Policy and Food Security

Minimum Support Price (MSP) and farmer protection

Writing Stats

424

Total words

7

Paragraphs

24

Bullets

Analytical and structured

Tone