The government of India needs to start looking into other parts of the cycle, as solving the MSP is not solving the main problems farmers face. The current announcement of MSP, being 1.5 times more than the cost does have its benefits to the farmer’s income. This, however, leads to lower consumption.
Policies that need to be examined for a better agricultural economy in India includes-
Purchasing Power- How much individuals are ready to spend on agriculture when in the market.
The Mandi System- The auctioning process for the vegetables after produce is not clear at all and needs to have a certain procedure.
Farmers Costs- The cost of machinery, storage, and transportation needs to be examined and then a proper MSP can be calculated.
Collection Centers- Should be strategically placed in Mandis where crops are sold.
Inspection- Grading and manual inspection need to be developed for crops other than rice and wheat to establish quality.
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Warehouses- Government should provide warehouses so that stock does not go to waste and is efficiently being transported for consumption at the right time.
Disposal- A system needs to be implemented for agriculture such as onions which splits faster than rice which can be in a buffer stock.
Price Differences- AGMARKNET Website needs to be thoroughly brushed up by the farmers so that they are aware of current market prices.
Overall with Rabi crops in place, there is still confusion on the promised 50% of the higher MSP than the cost for farmers. Is the cost, the comprehensive cost, which is the rent and interest on land and capital which is called C2 or is it A2 which is paid out the cost.
The importance of efficiency and productivity needs to be maintained even if MSP rises, as this can lead to not only local sales being affected but also exports from India.