Question Q.13CommentGS3GS3
Legalizing the Minimum Support Price (MSP) would create more challenges than it resolves. Comment.
Main Body
MSP scales to minimum price guarantee provided on 23 crops by GOI to support farmers and prevent price crash. MSP scheme:a) Covers 23 cropscerealswheat, ricepulsesmoong, turcash cropcotton, oilseedb) Decided by CACP on the basis of A2+FLc) Final announcement by CCEAd) Revised before every cropping seasonprocured through APMC networks. Why demand for legalization: (1) Farm Bill controversyfarmers feel govt is dismantling MSP.
2Rising uncertainties in farming sector → climate shocks, extreme weather events, etc (3) Reducing crop productivity → need of goat assurance → heatwaves reducing wheat production (4) Depending syndrome → MSP has made farmers continually depending (5) Market shocks → MSP gives cushion (6) Punjab & Haryana → major beneficiaries → main demand of these farmers Challenges: (1) Expenditure depending on MSP and subsidies → 4% of GDP on subsidy (2) Spending distribution → 80% procurement from Punjab & Haryana (3) Lack of capacity of storage with APMC → legalization will lead to wastage (4) Market distortion → demand & supply logic will fail
5Nomenclature of wheat-rice → affect crop diversification efforts of CCEA (6) Substantial burden on exchequer → 72000 Cr on just few crop procurement (4) Environmental challenges → a) soil fertility b) water imprint (8) WTO challenge → Red box as subsidy & challenged for the market distortion (9) Export pricing as prices are high compared to international prices (10) FCI buffer stock excessive storage leads to food wastage → 12000 Cr NITI Way ahead: → a) PMAASHA-PDPS MIS → b) Ashok Gulati → MSP must be expanded → c) Swaminathan → C2+60% → d) Ashok Gulati → income policy
290 words1 paragraphs
Topper
ASTHA JAIN
AIR 92025
Subject & Paper
GS3GS3
Topic
Agriculture and Food Security
Schemes
Issues Related to Direct & Indirect Farm Subsidies & Minimum Support Prices
Writing Stats
290
Total words
1
Paragraphs
analytical
Tone