Farmers' Demand for MSP Guarantee

• Farmers marching to Delhi primarily seek a legal guarantee on the minimum support price (MSP) for various crops announced by the Centre.
• However, this demand is criticised as illogical and impractical due to the limitations in enforcing MSP on all crops and quantities, especially in private trade.

Challenges in Enforcing MSP

• The government can only guarantee MSP on crops it procures, creating logistical challenges as it cannot buy the entire produce brought by farmers.
• Enforcing MSP on private trade is also problematic, as traders may refuse to purchase if asked to pay more than prevailing rates.

Proposed Solutions and Critiques

• One proposed solution involves the government transferring the difference between market-clearing price and MSP to farmers' bank accounts.
• However, this poses challenges in data collection and opens avenues for market manipulation.
• Overall, guaranteeing MSP through legislation could lead to logistical and fiscal challenges.

Alternatives to MSP

• Cost-plus MSPs oblivious to demand conditions could distort farmers' production decisions and increase price volatility.
• Alternatives to MSP include crop insurance and timely payout of claims for production losses due to factors like climate change.
• A minimum income support (MIS) through direct benefit transfers (per-acre or per-farmer) is proposed to enable informed market-driven decisions on what crops to grow.
• An MIS, in combination with a phase-out of water, electricity and fertiliser subsidies, will induce much-needed crop diversification.

Government Response and Engagement

• The government is urged to engage with protesting farmers rather than resorting to confrontational tactics.
• Past experiences, including the recent repeal of farm laws, highlight the importance of dialogue and avoiding the portrayal of protesters as anti-national or criminals.
• A more constructive approach to address farmers' concerns is crucial.