The Minimum Support price based on A2+FL method cost 2.5 lakh cr to the government and covers 22 crops.

Rationale behind MSP: 1) Provision of security of income to farmers 2) Preventing in-competitive practices by traders like cartelization 3) Procurement by the government and FCI under PDS 4) Setting a minimum price regime for the entire country Requirement of Reforms: 1) Market Consequences a Only 67% of farmers get the benefit of MSP (Shorta Supply committee) b High level of diversion 2) Environmental Consequence a Distress sales and inflation eg (Tomato farmers) in Maharashtra destroyed crop as protest b Distortionary and lack of price discovery eg (Based on A2+FL model instead of C2 model) 3) Environmental Consequences a Prevalence of Rice-wheat model eg (38%) monocropping b Regional disparity eg (80%) of Punjab and Haryana farms get benefit, unlike Telangana c Depletion of groundwater resources eg (85%) of entire water usage is in agriculture

Way forward: 1) Promotion of cooperative farming diversification by (Choudhary Braham Perkesh committee) 2) Adoption of model contract farming law 3) Diversify from size towards high value crops by (Mortek Singh Ahluwalia committee) 4) Promotion of secondary agriculture by (Ashok Dalwai committee) There is a need to re-look at the MSP policy and make it WTO Amber box compliant through evergreen revolution