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.
