Moving On From The Old-Age MSP To The New-Age MRP: NITI Aayog Suggests Innovative Way To Tackle Farmer Distress

NITI Aayog, the government’s apex think-tank, has mooted the idea of doing away with the decades-old Minimum Support Price (MSP) framework in favour of crop auctions at Minimum Reserve Price (MRP), reports The New Indian Express.

In its recently released vision document, titled “The Strategy for New India @75” put together by NITI Aayog, the think-tank has argued that farm distress in India cannot be addressed with an ever-increasing MSP.

MSP is a form of market intervention by the Government of India that assures the farmers that the government will buy their produce at a minimum guaranteed price. It acts as an insurance for farmers against any sharp fall in farm prices.

NITI Aayog puts forth the argument that MRP rates would act as a starting point for farmers to sell their produce in mandis (local markets in villages and towns). This free-market approach is expected to provide farmers with better remuneration for the crops than the state-controlled MSP system.

“The government should consider replacing the Commission on Agricultural Costs and Prices (CACP) by an agriculture tribunal in line with the provisions of Article 323B of the Constitution,” added the document. CACP is the apex agency in the country that recommends MSPs to the government before every sowing season.

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