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Discuss the basis of MSP and explain if it is beneficial to the Indian agricultural economy? Bring out the challenges in MSP Regime in the light of recently passed farm Bills.

Topic : Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System- objectives, functioning, limitations, revamping; issues of buffer stocks and food security; Technology missions; economics of animal-rearing.

3. Discuss the basis of MSP and explain if it is beneficial to the Indian agricultural economy? Bring out the challenges in MSP Regime in the light of recently passed farm Bills. (250 words)

Reference: Indian Express

Why the question:

The newly passed farm trade Bill has raised concerns that farmers may no longer be assured MSP for their crop. Thus the question.

Key Demand of the question:

Explain first the basis of MSP and explain if it is beneficial to the Indian agricultural economy and bring out the challenges of MSP regime in the backdrop of recently passed farm bills.

Directive:

Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer:

Introduction:

Set the context of the question first by explaining the fact that the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill does not give any statutory backing to MSP.

Body:

Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices. The minimum support prices are announced by the Government of India at the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP). MSP is price fixed by Government of India to protect the producer – farmers – against excessive fall in price during bumper production years. The minimum support prices are a guarantee price for their produce from the Government.

Discuss the key objectives of MSP, highlight the challenges associated with it.

Discuss the context of the recently proposed and passed farm bills, explain in what way they it raises concerns.

Conclusion:

Conclude with fair and balanced opinion and suggest suitable solutions.