Interrogating the MSP Regime, Farm Laws and Agrarian Future in India

The three new farm laws promulgated by the Government of India in 2020 as agricultural marketing reforms, with the claim that they were aimed at expanding farmers’ marketing choices and increasing their incomes, have triggered massive protests by farmers. These protests have crystallized around two key demands: first, repeal the laws and second, make the minimum support price (MSP) for procuring farmers’ produce a legal right. Given that discussions between the government and farmers’ organizations continue to be at an impasse, it is critical to understand the arguments over the laws and the MSP, and the implications of these arguments for the agrarian future of India.

Stochastic Analysis of Ragi (Eleusine coracana) Production in Karnataka

The purpose of present study was to describe the growth rate study for some time series production factors of ragi and also making of diagnostic study for detecting some influential time series production factors governing total ragi production in Karnataka and also in India during the period 1993 -2017. The secondary data was collected for analysis from Directorate of economics and statistics and http://indiastat.com. The maximum compound growth rate of MSP of ragi was observed in India as well as in Karnataka. Whereas negative CGRs were recorded for ragi production in India as well as Karnataka. The productivity and area of ragi had positive and significant correlation with ragi production in India, whereas ragi production of India had negative and significant correlation with value of output and minimum support price. These factors were found important for total ragi production of India.

The Value and Cost of Crop Minimum Support Price: Farmer and Consumer Welfare and Implementation Cost

In many developing countries, crop minimum support price (MSP) is a subsidy scheme to (i) improve farmer welfare by safeguarding farmers’ incomes against vagaries in crop price and (ii) improve consumer surplus by ensuring sufficient crop production. Among different mechanisms to operationalize an MSP scheme, we focus on credit-based MSPs under which the government credits farmers should the prevailing market price be below the prespecified MSP. By accounting for the implementation cost of the MSP, we examine the effectiveness of the MSP in terms of net benefit (i.e., farmer’s surplus minus the implementation cost) and net social value (i.e., sum of farmer’s and consumer’s surpluses minus the implementation cost) in a market that consists of risk-averse farmers with heterogeneous production costs. Also, farmers face two types of uncertainties: (1) market and (2) production yield uncertainty. We find that a credit-based MSP can induce crop production, which is intuitive. However, we find some more interesting results: (i) offering a higher MSP may not improve farmer’s surplus, (ii) the net benefit of an MSP can be negative—the cost of offering an MSP can exceed the farmer’s surplus, and (iii) there exists an MSP that maximizes the net social value. We extend our single-crop model to the case of two crops to capture the intercrop MSP interaction. We show that when one crop is more rewarding but riskier than the other crop, then it is sufficient to offer an appropriate MSP for one of the two crops while offering no MSP to the other crop. This paper was accepted by Vishal Gaur, operations management.

Comparative Economic Analysis and Profitability of Tomato ((Lycopersicon esculentum) Production in Selected Districts of Punjab State

The study was conducted to analyse the comparative economic analysis and profitability of tomato production in selected districts of Punjab state. A primary data was collected in the year 2019-20 by using multistage stratified random sampling technique. Two top ranking districts namely Amritsar and Patiala on the basis of highest area under tomato crop were purposively selected in the Punjab state. A sample of 200 tomato growers were selected, 100 each from both the districts from 21 producing villages selected from Patiala and Amritsar district of Punjab state. The results of the study indicated that the average area under tomato crop was highest in case of Amritsar district i.e. 10.90 acres as compared to 2.98 acres in Patiala district. Majority of the farmers in both the districts were using hybrid varities. 575 variety is basically demanded by the factories or tomato companies and mostly preferred by processing firms. The total variable cost was estimated highest in case of Patiala district (Rs.59262.63/acre) as compared to Amritsar district (Rs.47779.15/acre) due to the difference in their cultivation methods (Bamboo staking vs open field cultivation), varietal difference, nursery preparation methods, seasonal and geographical difference. The returns over variable cost was found higher in case of Patiala district i.e. Rs. 85142.42 than Amritsar district (Rs.61882.74). The study concluded that the tomato cultivation in Patiala district was found more profitable than Amritsar district. It was recommended that the primary agricultural credit cooperative societies and other funding agencies should be persuaded to provide adequate short term credit facilities to cover the higher operational cost. Government should ensure the supply of hybrid seeds to tomato growers at subsidized rates and ensure better minimum support price to tomato growers so that farmers received price at least cost equal to the cost of production.

An Analytical Study of Relationship between Socio-Economic Profile and Impact of Minimum Support Price Scheme on Small Farmers of Begusarai District of Bihar

Minimum Support Price fixed by the government to protect the farmers against excessive fall in price during bumper production years. Questions, are being raised about the efficacy and effectiveness of the instruments of price policy specifically the Minimum Support Prices. Under these circumstances it assumes greater significance to understand the impact caused by the minimum support prices on small farmers with socio-economic scale. Total of 60 beneficiaries and 60 non-beneficiaries was selected in Teghara block of Bihar district by purposive sampling method. The primary data were collected with the help of interview schedule and the responses were recorded, classified and tabulated and appropriate statistical tools were employed. The results showed that higher percentage of small farmers were middle aged, attained middle school level education and had low income, the beneficiaries who had primary school level education with high farm experience, present near to the market and contacted extension agents had been sought to have more impacted.

Farmers Suicide Causes and Remedies to avoid of Hingoli District in Maharashtra State : A Geo-Political View

The present research carried out with an exploratory design of social research on farmer’s suicide of Hingoli District in Maharashtra State . These districts were The Hingoli consists of the Five Talukas (Hingoli, Kalamnuri, Basmat, Aundha, Sengaon). The average rainfall in the district is 895 mm. About 83% of the rainfall occurs during June to September and July is the rainiest month. The maximum temperature of the district is 42.6 degree Celsius and minimum temperatures are 10.6 Degree Celsius. Over 192 farmers have committed suicide in Hingoli District between 2008 and 2017. In Hingoli District the farmer 56.25per cent, The majority of the farmers had medium extension contact 38.75per cent, Medium level of cropping intensity 83.75per cent, Medium level of economic motivation 57.50%, deferred gratification were found 70.00 per cent in middle category, management orientation of the farmer is middle level 67.50per cent, farmers found in middle level of the indebtedness 80.00per cent, Majority of the farmer engaged in farming and farm labours 72.50per cent. Indebtedness is negative significant. The relationship was significant at 0.05 level. Major causes of farming distress is failure of crops due to drought/ lack irrigation, failure of crop due to insect disease. Indebtedness related causes increase in indebtedness is major region of distress. Major Social causes of farmer dowry and marriageable age of daughter and sister. Farmer suggests that there should be minimum support price for all crops.

Effectiveness of Auctions in Securing Price Support for Farmers: The Case of a Grain Market in India

This paper reviews rice procurement operations of Government of India from the standpoints of cost of procurement as well as effectiveness in supporting farmers’ incomes. The two channels in use for procuring rice till 2015, were custom milling of rice and levy. In the first, the government bought paddy directly from farmers at the minimum support price (MSP) and got it milled from private millers; while in the second, it purchased rice from private millers at a pre-announced levy price thus providing indirect price support to farmers. Secondary data reveal that levy, despite implying lower cost of procurement was discriminated against till about a decade back and eventually abolished in 2015 in favor of custom milling, better trusted to provide minimum price support. We analyze data from auctions of paddy from a year when levy was still important to investigate its impact on farmers’ revenues. We use semi-nonparametric estimates of millers’ values to simulate farmers’ expected revenues and find these to be rather close to the MSP; a closer analysis shows that bidder competition is critical to this result. Finally, we use our estimates to quantify the impact of change in levy price on farmers’ revenues and use this to discuss ways to revive the levy channel.