The Minimum Support Price regime covers 23 crops but procures only paddy and wheat at scale. Examine the structural distortions in the MSP system and the case for crop diversification.

Introduction:

The Commission for Agricultural Costs and Prices announces Minimum Support Prices for 23 crops, but Shanta Kumar Committee (2015) found that only 6% of farmers benefit and procurement is concentrated in paddy and wheat — accounting for 92% of MSP outgo of ₹2.6 lakh crore in 2024-25 (FCI Annual Report).

Structural distortions: Skewed procurement in Punjab, Haryana and western UP has produced groundwater stress (CGWB 2024 reports 76% over-exploited blocks in Punjab), monoculture, and stubble burning. Pulses and oilseeds, despite a 30% gap between domestic demand and supply, see procurement under PM-AASHA below 25% of MSP-eligible output (PIB, March 2026), forcing imports of ₹1.5 lakh crore in edible oils.

Legal MSP debate: The 2021 SKM agitation and 2024 Punjab-Haryana mobilisation reopened the demand for statutory MSP. CACP itself flagged that a legal guarantee on all 23 crops at C2+50% would cost ₹10.5 lakh crore — 3.4% of GDP — and trigger WTO domestic-support disputes (Amber Box ceiling: 10% of value of production).

Reform pathways: Price Deficiency Payment (Bhavantar), Madhya Pradesh's Bhavantar Bhugtan Yojana, and the NITI Aayog Working Group on MSP (2024) propose deficiency payments via DBT-Agri stack and FPO-led procurement, leveraging e-NAM's 1,389 mandis and 1.78 crore registered farmers.

Way forward:

The Ministry of Agriculture & Farmers' Welfare should pilot a Price Deficiency Payment under PM-AASHA for pulses and oilseeds in 100 districts by Rabi 2027, and link the AgriStack with PMFBY and e-NAM, capping MSP fiscal burden at ₹3 lakh crore.