Legalising MSP: The Need To Face The Challenge

Guaranteed minimum support prices & other reforms can slash the big margins middlemen claim to raise food prices. As talks with farmers continue, lessons can be learnt from some states

- T N Prakash Kammardi

As the renewed agitation of farmers in the heartland of the Green Revolution marks its anniversary, with leader Jagjit Singh Dallewal intensifying his fast-unto-death at the Khanauri border between Punjab and Haryana, the central government has invited the protesting farmers for a second round of talks in Chandigarh today. While the first round on February 14 was described as 'cordial', the crucial issue of a legal guarantee for minimum support prices (MSP) was sidestepped—something farmers insist must be on the agenda this time.

Support for MSP guarantee is growing, with political parties and the parliamentary standing committee on agriculture backing it. Under increasing pressure, the government seemingly has little choice but to prioritise farmers' welfare and national food security.

This would require a firm stance against intermediaries—traders, middlemen and some agribusiness firms—posing a significant challenge for the government and compelling a shift in agrarian policies. A conciliatory approach from the Centre would be essential, especially as it advances the National Policy Framework on Agricultural Marketing, which peasant groups view as an attempt to corporatise agriculture.

Each state's Agricultural Produce Market Committee Act must be amended to ensure farmers' produce is never purchased below the MSP, with penalties for violations. The government must also be prepared to procure up to 25 percent of total production as permitted under the price support scheme (PSS) if private traders fail to procure at the MSP—especially during post-harvest periods when temporary supply-demand mismatches occur. A national policy framework reflecting such strong government 'intervention' would stabilise prices above the MSP without overburdening the exchequer.