A STUDY ON ROLE OF MSP AND TRADE POLICIES ON INCOME STABILITY OF SMALL FARMERS: EVIDENCE FROM NARSINGHPUR DISTRICT, MADHYA PRADESH

ECONOMICS

This study aims to identify the gap between Minimum Support Price (MSP) declaration and actual farm gate price realization, by studying the various factors that lead to distress sales for various crops. While Narsinghpur is a highly productive multi crop hub, famed for its ODOP Toor Daal, sugarcane belt and the specialized Kranti variety of Rice essential for the regional Poha industry, small farmers continue to struggle with chronic income instability." Through a synthesis of secondary literature and preliminary field interviews in Narsinghpur, Kareli, and Gadarwara, the study highlights a fundamental legal disconnect while the Minimum Support Price (MSP) is declared for 22 crops, it remains a policy guideline for government procurement rather than a mandatory price floor for the open market. There are no legal provision compelling Mandi-registered private traders to buy at or above MSP, leaving farmers entirely reliant on the state’s limited procurement window. Analysis suggests that logistical friction and quality-check failures often force distress sales at 15–20% below MSP. Furthermore, recent geopolitical shifts and trade policies, including the Iran-US conflict, have surged input costs while trade caps suppress output prices. The research argues that institutional reform and price certainty are vital for farmer stability and Atmanirbhar Bharat.

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