Topic: Issues related to direct and indirect farm subsidies and minimum support prices;
6. Minimum Support Prices (MSPs) are designed to serve as a safety net for farmers, ensuring them a minimum price for their agricultural produce. However, the intended goal of making MSPs a means of income security for farmers faces several challenges and limitations. Analyse. (250 words)
Difficulty level: Moderate
Reference: Down to Earth
Why the question:
The article discusses how Minimum Support Prices (MSPs) in India are calculated using an outdated formula that doesn’t consider comprehensive costs.
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 calculations continue to be based on older methods, Lack of price realisation, 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.
