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Budget 2021: MSP is here to stay at 1.5 times

Dr. Rakesh Singh
6th February 2021

The Budget has assured that MSP is here to stay at a minimum 1.5 times the cost of production across all commodities this year.

The Budget has assured that MSP is here to stay. MSP will be at minimum 1.5 times the cost of production across all commodities this year. In India in the last two years MSP has increased by 2.5 folds for both wheat and rice. This trend points towards the fact that India’s will need to continue this MSP regime for two reasons. First The beneficiaries of the MSP regime Punjab and Haryana along with Western UP will get to their status quo of selling their produce to the Government and second, given the levels of poverty in India a food security PDS system will have to be maintained for years to come.

Government Has also allocated a sum of 1000 crores from rural infrastructure development fund for strengthening The APMC infrastructure and making APMC ready as a benchmark for all private players like aggregators, farmer cooperatives and Corporates to make enough investment so that farmers can have alternative choices. There is an intent to strengthen and focus APMC as well as develop alternative choices for the farmers.

Punjab, Haryana and western UP have been in the trap of producing what the government will buy. Punjab agriculture is facing a crisis due to this as there is no diversification of crops and secondly this is having a huge impact on groundwater and climate change related problems. Progressive farmers in Punjab are at disadvantage as they do not have the alternative marketing structure for selling their products thus limiting the growth of agriculture and the progressive farmers. The problem is far worse in the rest of the states as there is a weaker APMC market and MSP is nonexistent on one hand and Choices do not develop as it is not viable because of lack of infrastructure. Hope we stop demanding status quo and give way to hope, change and prosperity. Farmers from other states will benefit too along with Punjab, Haryana and Western Uttar Pradesh.

Indian agriculture has the competitive advantage and is poised for growth lets not kill this opportunity. ♦♦♦♦♦

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