Will MSP Theory Work For Farmers?
Indian Economy & Market|February 2018

Finance Minister Arun Jaitley has announced that MSP (Minimum Support Price) @ 50% above the cost of production will be given to farmers for Kharif which will start coming in the market in Sept-Oct. He also said that the MSP is being implemented for 23 crops of Rabbi.

Gautam Deshmukh
Will MSP Theory Work For Farmers?

There are two important factors in it. One is how the government derives the cost of produce whether it is 50% above C2 (Comprehensive cost of production, which includes imputed rent and interest on owned land and capital) or A2+FL measure (which includes paid out cost on inputs plus an imputed value of family labour) and the second will be an actual procurement facility made available by the government. At MSP or paying the farmers difference between MSP and market price at which Aadat (Middleman) purchases.

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