Topic: Issues related to direct and indirect farm subsidies and minimum support prices
4. What is the Minimum Support Price (MSP) system for agricultural commodities in India? Is MSP System helping the farmers, or is failing them? Critically examine (250 Words)
Difficulty level: Moderate
Reference: The Indian Express, GaoConnection
Why the question:
The article is by renowned agriculture expert Ashok Gulati. He explains the negative impact of the MSP system in India as well as suggests measures to reform it.
Key Demand of the question:
Explain the MSP system, how has it been helpful for the farmers as well as issues associated with it.
Directive word:
Critically examine – When asked to ‘Examine’, we have to look into the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications. When ‘critically’ is suffixed or prefixed to a directive, one needs to look at the good and bad of the topic and give a fair judgment.
Structure of the answer:
Introduction:
Give a brief introduction of the MSP system followed in India
Body:
Give a brief description of how MSP system has helped safeguard the interest of the farmers in India.
Then go on to detail the issues with the MSP system e.g. MSP distorts the basic logic of the supply-demand mechanism, slows down the process of diversification, and is economically a very expensive and inefficient policy instrument, besides leading to massive leakages and corruption.
Briefly list down some of the suggestions to reform the system especially the call by some to legalise the MSP system.
Conclusion:
Conclude with a balanced viewpoint and need for further reforms in MSP system.
