There is mounting pressure on the Government to legalise MSP (Minimum Support Price), which officially ensures a floor price on select crops, to farmers. According to sources, a committee that was formed three years ago to address the concerns of farmers, and improve the agriculture sector, widely referred to as the MSP Committee, has hinted that even if the government cannot introduce MSP as a law, it needs to find ways to promise and assure the growers that they will be paid a minimum amount. The panel is yet to submit its final comprehensive and consolidated report.
Other pressure points have emerged, both within and outside the Government. A report (December 2024) by the Parliamentary Standing Committee on Agriculture, Animal Husbandry and Food Processing recommended “implementing a robust and legally binding MSP system” to address farmers’ woes. It added, “The benefits and advantages of implementation of MSP as legal guarantee far outweigh its challenges.” Mark the key phrase, legal guarantee.
Protesting farmer groups, which have consolidated under the banner of Samyukta Kisan Morcha, have demanded both revision and legalisation of MSP. It has called for a nationwide protest on August 9 to push for its 11 demands. Since the time the Government enacted the three contentious farm laws, which were aimed to privatise agriculture, growers squatted on highways. This forced the Modi regime to take back the laws. Although not as intense as earlier, the protests continue in some states.
According to reports, the MSP Committee, which was formed eight months after the three farm laws were repealed, has suggested other ways to make MSP more effective and transparent. For example, the Commission for Agricultural Costs and Prices (CACP) can get statutory backing to increase its autonomy. CACP recommends MSP revisions on a regular basis. The committee wants MSP coverage to extend to all pulses and oilseeds, and not just the now-designated 22 crops.
A Farmer Price Index, states the committee, can guide MSP revisions, and a real-time price-discovery portal, which integrates data from official mandis, private ones, and e-NAM (National Agriculture Market), is essential. These will strengthen the existing MSP regime, and allow the Government to publicly promise or assure the farmers that their financial health will be protected. But legalisation will prove to be a thorny issue.
For decades, ever since MSPs kicked in, they have become a pain in the neck for policy-makers and beneficiaries. Governments have railed about the lack of funds to buy the farmers’ produce. This is why they restrict payments to 22 crops, and pinpoint limited purchase targets for the official buying agencies. In 2024-25, ending June 30, 2025, the country spent Rs 3.33 lakh crore on MSP-driven procurement. If the present regime legalises it, expands it to all crops and makes it universal (applicable even to private traders), the liability may soar three times to Rs 10 lakh crore.
Farmers feel that they are constantly short-changed, both by the Government and private buyers. At official levels, there are targets, and procurement levels are quite low in some states, and some seasons. In case of private sales, the growers are bullied and cheated, and forced to sell at below-MSP prices. There were cases during glut when the farmers paid the private buyers to pick up the produce.
An additional challenge is that agriculture is included in the State List of the Constitution. All the states do not conform to MSPs. In Bihar, farmers sell to state-run Primary Agriculture Credit Society. But the society’s offtake is minimal, and most of the produce is sold to the commission agents. Being limited to certain states, and specific crops, only 12 per cent of the growers across the country currently benefit from MSPs.
Prices of a crop vary across the states. The report (December 2024) of the Standing Committee stated that this will be an issue to determine a meaningful variable, which is a common denominator of pricing across the country. Ensuring that the same pricing is implemented nationwide is a tricky challenge. Not just economics, but politics, and local and cultural factors can undermine progress on the MSP front in the future.
Sources, who are aware of the procedures of the MSP Committee, contend that these vexed issues constitute the main reason for the delays in its final report. Till date, three sub-committees, which were formed to address specific issues, have submitted interim notes.
The author is a senior journalist with over three decades experience across print, TV and digital media