A case to make MSP legal right of farmers

Context: Debate on whether the Minimum Support Price (MSP) being paid to farmers is much higher compared to the international prices.

Role of developed countries subsidy support in reducing global prices: 

• Cotton subsidies: provided  by the US has brought down the global prices, pushing cotton farmers in west Africa to suffer economic losses.

• World Bank study: 40% drop in cotton prices leads to a 21 per cent reduction in farm income. This results in a 20% rise in poverty.

• Subsidy in dairy products: European dairy corporations  to remain competitive, are dumping cheap dairy products.

• This is pushing small dairy farms out of business in developing countries.

Way Forward:

• International prices should not be treated as a benchmark for fixing MSP for domestic farmers.
• Making MSP a legal right: for farmers as suggested by Commission for Agricultural Costs and Prices (CACP).
• Direct income support: to farmers to fill the income shortfalls.