"The sole point of MSP is to protect farmers from sudden price shock". Do you think legalization of MSP can insure farmers from sudden price shocks? What are the other measures which can be taken to make MSP-led procurement effective?

Legalization: Favour (Protect from Price shocks)

(1) will ameliorate us from (W), Rice monoculture: Assured procurement equally → agri diversification (crop blind procurement)

(2) would prevent distress sale under pressure of middlemen as farmers would be assured of MSP price.

(3) Dalwai committee: only 15-40% of final prices reach farmers (will improve after legal)

(4) Declining productivity of Agri may get even out POST diversification.

Legalization: Against

(1) Fiscal Bomb: currently, MSP subsidy ≈ ₹ 2 lakh cr. p.a. → shoot to around ≈ ₹ 10 lakh cr. p.a. (NITI, R. Chand)

(2) WTO issues: Amber Box, De-minimis support

(3) Food Inflation will spike

(4) Public Investment in Agri. would suffer upon MSP legalization → subsidies mostly benefit larger farmers (Dalwai Co.)

(5) Dependency Syndrome &

(6) Breakdown of Agri markets; futures, etc. contracts will suffer.

making system more efficient

(1) Improving MSP-support schemes (MIS, PM-AASHA, etc)

(2) From Price-based support to Income based support (Ex: PM KISAN) → benefits small farmers alike → WTO compliant support.

(3) Enhancing Public Investment in Agri → storage & cold storage (MIDH scheme, Agri-Infra Fund) → transport & marketing for better price discovery)

(4) Promoting Food Processing.

(5) Crop Insurance to deal with exigencies. (Fasal Bima)