DMPQ- Critically evaluate India’s Efforts to use MSP as a tool to double farmer’s income.

. After two successive droughts in 2014-15 and 2015- 16, the government set out an ambitious target to double farmers’ incomes by 2022-23. The Ashok Dalwai Committee was set up to chalk out a strategy to achieve this target of doubling farmers’ incomes and set the goal to be achieved over seven years with the base year of 2015-16. It clearly stated that a growth rate of 10.4% per annum would be required to double farmers’ real income by 2022-23. According to an estimate of farmers’ income for 2015-16 by NABARD in 2016-17, the average monthly income of farmers for 2015-16 was Rs 8,931.

Criticism of the MSP

No MSP For Allied Sector: The scope for augmenting farmers’ incomes is going to be more from allied sectors like rearing animals (including fisheries). It is worth noting that there is no minimum support price (MSP) for products of animal husbandry or fisheries and no procurement by the government.

Inadequate Storage System: Those who believe that farmers’ income can be increased by continuously raising the MSP of grains and government procurement. € However, the fact that grain stocks with the government are already overflowing and more than double the buffer stocking norms.

MSPs in Favour of Paddy and Wheat: Skewed MSP dominated system of rice and wheat leads to overproduction of these crops. € Further, it discourages farmers to grow other crops and horticulture products, which has higher demand and subsequently could lead to increase in farmers income.

Economically Unsustainable: The economic cost of procured rice comes to about Rs 37/kg and that of wheat is around Rs 27/kg. However, market prices of rice and wheat are much lower than the economic cost incurred by the Food Corporation of India (FCI).

 

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