Minimum Support Price: Challenges and Policy Recommendations

Abstract

Minimum Support Price as a price policy instrument was first introduced by the government of India in 1966-67. The major objectives of MSP are to support the farmers from distress sales and to procure food grains for public distribution. Since introduction of MSP as a price policy it has been suffering from different challenges and hurdles. In general limited reach, mounting fiscal burden, environmental issues, market distortion and limiting agricultural diversity are some of the major issues and challenges related to MSP. However the government needs to find out the defects and limitation of different policy like MSP in relation to implementation part and timely action to ensure proper execution of these policies is a must.