Examine the case for and against the legal guarantee of Minimum Support Price (MSP) as demanded by farmer movements.

Introduction:

The Standing Committee on Agriculture (2024) recorded that only 6-7% of India's farmers actually realise Minimum Support Price; CACP recommends MSP for 23 crops, but procurement is concentrated in Punjab-Haryana paddy-wheat. Farmer movements since 2020-21 have demanded a legal MSP guarantee, with the SC-appointed committee on farm laws (Anil Ghanwat panel, July 2022) calling for a recalibrated price-support framework.

Case for a legal MSP:

A statutory MSP would assure remunerative income aligned with the Swaminathan C2+50% formula, deepen procurement of pulses and oilseeds under PM-AASHA's PSS and PDPS components, and enable climate-resilient diversification beyond rice-wheat. It would also formalise NAFED and e-Samridhi procurement, protecting small and marginal farmers from distress sales in private mandis.

Case against:

NITI Aayog has flagged a potential ₹10 lakh crore fiscal exposure if all 23 crops are procured at MSP. It risks breaching the WTO Article 6.4 de minimis cap of 10% Aggregate Measurement of Support, distorts cropping patterns (Punjab paddy-groundwater nexus), and crowds out private trade in mandis, with adverse implications for export competitiveness.

Architectural reality:

CACP only recommends; CCEA decides. The A2+FL versus C2 debate, open-ended procurement, and PMGKAY's ₹11.8 lakh crore overhang already strain food-subsidy budgets without a legal guarantee, while Madhya Pradesh's Bhavantar Bhugtan model offers a less distorting price-deficiency alternative.

Way forward:

Scale Price Deficiency Payment under PM-AASHA, legally guarantee MSP only for diversification basket (pulses, oilseeds, millets), digitise e-Samridhi/NAFED procurement, and renegotiate the WTO Peace Clause by 2030 under the Bali package architecture.