Effectiveness of Minimum Support Price Policy in India: A state wise analysis
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Date
2023
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Punjab Agricultural University
Abstract
The present study has examined the awareness of MSP and its effectiveness for various crops across major states of India. The study is based on 77th round of NSS for 2018-19. The incidence of crop sales at MSP and the quantity of produce sold on MSP were used as the effectiveness of MSP for a crop. Simple correlation analysis was used to examine the relationship between awareness and effectiveness of MSP. OLS and logit regression models were used to identify the factors affecting the effectiveness of MSP. On average, the awareness of MSP is below 50 per cent for any crop. Sugarcane and paddy are two major crops with the highest level of awareness. Punjab, Haryana, Chhattisgarh, Madhya Pradesh, Maharashtra, and Telangana exhibited more paddy and wheat sales at MSP or above in India. Barring maize and sugarcane, the price gaps showed an apparent decline with an increase in the land size category. There is a significant and positive correlation between the awareness and effectiveness of MSP for all crops. The OLS results also indicate that awareness is a significant factor influencing the effectiveness of MSP for all the crops in our study. The large producers could sell more on MSP. The variables such as education and access to public extension services influence the effectiveness of MSP for paddy and wheat only and have almost no or significantly less influence on the MSP realization for other crops. There is a need to raise awareness of MSP, expand its benefits to others crops, and increase particular focus on smallholder farmers to raise the effectiveness of MSP and increase welfare of the farmers in India.
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Nandi, Sukhendu (2023). Effectiveness of Minimum Support Price Policy in India: A state wise analysis (Unpublished M.Sc. thesis). Punjab Agricultural University, Ludhiana, Punjab, India.