The Government has increased minimum support prices for kharif commodities dramatically because it has realised that it was not doing enough for the farmers, said Ashok Gulati, Infosys Chair Professor at the Indian Council for Research in International Economic Relations (ICRIER), in New Delhi.

There is now a realisation in the political circles that farmers haven’t been getting their due in the previous years. That is a good thing, Gulati said on the sidelines of an event here.

MSP no answer

“Unfortunately, if they think everything can be corrected just by raising MSP, that is not going to happen,” he said adding that increased MSP rates have failed to lift the mood in mandis across the country. Commodity prices in different agricultural markets in the country either remained same or went down even after the new MSP rates were announced. In Jamnagar in Gujarat, for instance, the groundnut prices were 37 per cent lower than 2017-18 MSP and 43 per cent lower than the newly announced MSP, he said. Urad in Madhya Pradesh’s Ujjain market, was 59 per cent lower than last year’s MSP, while moong in Surat market is sold at prices 26 per cent lower.

Similarly maize in Karnataka’s Davangere market is being sold at prices 38 per cent lower than latest MSP rate.

Buy or compensate

“So, if you have to make the new MSP to work, either you have to buy the produce or you have to make price deficiency payment,” he said.

According to Siraj Hussain, former Union agriculture Secretary and senior fellow at ICRIER, the quantum jump in MSP for cotton is worrisome as it takes it beyond the global prices. “The Government will end up buying the cotton and it will incur huge losses as it will find it difficult to export,” he said.,

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