A case to make MSP legal right of farmers

The Tribune     22nd June 2020     Save    
QEP Pocket Notes

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. 
QEP Pocket Notes