Topic– Issues related to direct and indirect farm subsidies and minimum support prices
5) Critically examine the impact of recently announced MSP which is in line with the long standing Swaminathan Committee recommendations?(250 words)
Why this question
The article discusses the impact of increased MSP on farmers welfare and inflation. This has been a longstanding recommendation and now we need to examine whether it would help our grief stricken farmers improve their situation.
Key demand of the question
The question expects us to analyze whether increasing MSP would address farmers situation and the resultant impact it might have on inflation, when it is already under pressure due to rising crude prices.
Critically examine – When you are asked to examine, you have to probe deeper into the topic, get into details, and find out the causes or implications if any. When ‘critically’ is suffixed or prefixed to a directive, all you need to do is look at the good and bad of something and give a fair judgement.
Structure of the answer
Introduction – Highlight that there has always been a demand for even higher MSP, thinking it would obviate the farmers grievances, now that it has happened we need to analyze how effective it will be.
- Mention the step taken by the government. Highlight that Commission on Agricultural Costs and Prices estimated that costs (calculated on an A2 + FL basis) have risen in a range of 0 to 8%, with a mean increase of 5%, which means that there isn’t such a high corresponding increase in costs.
- Examine the impact that it will have on inflation
- Analyze whether increasing MSP would help alleviate farmers grievances. Mention the shortcomings of MSP such as poor penetration in several parts of the country, effective only for a specific set of crops etc. Also highlight that the farmers do indeed need price support as cost for their produce is getting affected both during surplus and deficit production.
- Discuss an alternative such as Price deficiency payment as suggested by NITI Ayog.
Conclusion – Mention your view on the step taken and the way forward.