A Nexus between MSP and Farmer’s Income in India: A Critical Review

Abstract

One of the most contentious agricultural policy tools in India is still the Minimum Support Price (MSP). It was created mainly to shield farmers from price fluctuations and guarantee profitable returns, but it is also increasingly seen as a way to increase farmer’s earnings. Nonetheless, there are still concerns about how much MSP actually helps the majority of Indian farmers in increasing their income. This review synthesises evidence from academic studies, government reports, and independent research institutions in order to critically assess the body of literature currently available on the relationship between MSP and farmer’s income. The results show that although MSP prevents distress sales and is a useful tool for price stabilisation in procurement-intensive areas, the structural, geographic, and institutional constraints limit its potential substantially. The review identifies gaps that need more research, highlights important areas of agreement, and looks at the wider policy implications for improving the effectiveness and inclusivity of MSP.