Need of MSP in India

MSP stands for Minimum Support Price , which is a guaranteed price set by the government to protect farmers from market fluctuations.

  • Origin: Introduced about 60 years ago to ensure food security when India faced food shortages.
  • Initial Issues: MSP was not linked to production costs initially; instead, the government provided subsidies on fertilizers and chemicals to boost production.
  • Over time, farmers became market-dependent , leading to exploitation by traders. Increasing cost of production but stagnant MSP has worsened farmer distress.

Farmer Suicides and Economic Loss

  • 4,00,000 suicides reported in three decades (official), but actual figures could be 7,00,000 .
  • OECD (Organisation for Economic Co-operation and Development) Report states that farmers suffered losses of Rs 60 lakh crore due to low MSP.
  • Farmers in states like Bihar and UP sell paddy at Rs 1,000–1,400 per quintal , far below the MSP of Rs 2,325 per quintal .
Need of MSP in India

Punjab’s Water Crisis and Crop Diversification

  • Groundwater depletion: 3,000–3,500 liters of water required to produce 1 kg of rice . Water reserves may last only 15–20 years for drinking purposes.
  • Solution – Crop Diversification: Farmers demand MSP guarantee for 23 crops to shift away from water-intensive crops like rice and wheat .
    • Benefits:
      • Reduces groundwater depletion .
      • Cuts electricity consumption by 60% , making power cheaper for households.
      • Helps reduce India's import bill (Rs 2 lakh crore on oilseeds and pulses annually).
      • Ensures self-sufficiency in food production.

Need for a Legal MSP Guarantee

  • Financial Feasibility: Experts suggest Rs 20,000–50,000 crore is enough to guarantee MSP, far less than India’s import costs .
  • Health Benefits: Palm oil, widely consumed, is processed with hazardous chemicals ; promoting domestic oilseed production under MSP can improve food safety .
  • Failure of Current MSP System: Government claims to offer MSP, but many states restrict procurement (e.g., Rajasthan limits the quantity of paddy bought at MSP).
    • Market Price Support (MPS) provided by the government is lower than required , leading to farmer distress.

MSP must be guaranteed by law to

  • Prevent farmer suicides and economic distress.
  • Conserve water and energy .
  • Protect public health by reducing dependence on harmful imported products .
  • Ensure food security and national economic stability .

Urgent government intervention is necessary to ensure fair prices and safeguard the agricultural sector .