Print Friendly, PDF & Email

Minimum support prices (MSP) are meant to function as a safety net. Yet, they are unable to become the means of farmer’s income security as intended. Analyse.

Topic: Issues related to direct and indirect farm subsidies and minimum support prices;

5. Minimum support prices (MSP) are meant to function as a safety net. Yet, they are unable to become the means of farmer’s income security as intended. Analyse. (250 words)

Difficulty level: Moderate

Reference: Live Mint

Why the question:

The government has announced minimum support prices, MSPs, for 14 summer crops, chief among which is rice. While the average increase is 6%, the increase for rice is the lowest, at 5.1%. 

Key Demand of the question:

To write about the current limitations of MSP and changes that are needed in it.

Directive:

Analyse – When asked to analyse, you must examine methodically the structure or nature of the topic by separating it into component parts and present them in a summary.

Structure of the answer:

Introduction:

Begin the defining the concept of MSP.

Body:

Frist, write about the various objectives behind MSP.

Next, write about the reasons as to why MSP has not achieved its stated objectives – 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.

Next, discuss what needs to be done. Highlight the efforts of the government in this direction

Conclusion:

Write a way forward.