Raising MSPs won’t save agriculture if costs keep rising

While MSPs have risen in the past, the steady rise in input costs has absorbed most of the increases.

There is much ongoing debate on the new minimum support prices (MSPs) for crops declared by the Government of India. For Kharif 2022-23, the MSP for rice was raised by Rs 1 per kg, and the MSP for maize by 92 paise per kg. For pulses, oilseeds and cotton, MSPs were raised by Rs 3-4 per kg.

On the one hand, some economists argue that MSPs lead to higher inflation. However, this argument is considered specious as only a part of the total production of major crops in India are procured; and, at the national level, MSP covers only 13% …


R. Ramakumar

R. Ramakumar is an economist and a professor at the Tata Institute of Social Sciences.