Ananya Gosain
13 September 2021
As per your query, i'd like to inform you although the new farm laws nowhere mentions MSP, they allow the sale and purchase of crops outside these state government-regulated market yards (Mandis). Farmers fear that freeing up markets for private traders without any fee or oversight by state governments will break down the traditional markets. 90% of wheat and paddy in Punjab are transacted in these markets at minimum support prices (MSPs) that the central government fixes every year. A move away from this system could potentially affect everyone on the interconnected chain, and may imply that government will, eventually, stop buying from them at MSPs, leaving farmers at the mercy of large corporations. MSP acts as a kind of guaranteed floor price, aimed to prevent distressed sales by farmers.
The government has maintained that the recently announced reforms will result in better price discovery. The government has already offered broad concessions to farmers, proposing to amend two farm-reform laws, and offered in writing an assurance to continue the system of minimum support prices (MSP).
Hope this helps
Regards
