Source: FM’s speech 1 Feb 2021
While successfully making a political point that the current government is no less committed to the welfare of farmers, these numbers clearly present an unaddressed problem that the government has to tackle head-on soon.
The MSP system was designed to provide a safety net in case the prices crashed, to procure for supply under the Public Distribution System, and maintain buffer stocks. Today, sale to government agencies at MSP seems to be the preferred choice of farmers. It indicates that either MSPs need rationalisation or the markets are not working for the benefit of the farmers. In another sense, production is exceeding what the market can absorb. How these commodity mountains are being managed, what is the holding cost, and how will they be managed if the year-on-year procurement keeps growing are questions that beg answers. The matter needs a fix, to which the government cannot remain indifferent for much longer.