Barriers to Effective Implementation of MSP : Evidence from Farmers in Punjab

Abstract

This study was conducted to identify the problems and constraints faced by farmers in Punjab in the operation of the Minimum Support Price (MSP) scheme, particularly for the principal crops. Four major crops - wheat, moong, rapeseed & mustard, and cotton were selected to represent different crop groups, namely food grains, pulses, oilseeds, and commercial crops. The selection of crops was based on the highest triennial average gross cropped area within each crop group. A stratified multistage random sampling technique was used to select districts, tehsils, and villages. Atotal sample of 320 farmers (80 farmers for each crop) was randomly selected, and the required data were collected using a pre-tested interview schedule. Garrett's ranking technique was used to analyse the barriers faced by farmers in the MSP scheme. Eight major barriers were identified, including a lack of awareness about MSP and market information, a lack of remunerative prices, delays in procurement, delays in payment, exploitative middlemen, transportation problems, inadequate institutional facilities, and the absence of grievance redressal mechanisms. Among these, the lack of institutional capacity to deliver market services, the lack of remunerative prices, and limited awareness of MSP and market information emerged as the most significant barriers. The results further revealed that the the lack of institutional capacity to deliver market services was the most prominent barrier for moong and rapeseed-mustard growers. In contrast, cotton growers reported a lack of remunerative prices as the major issue, while wheat growers identified a lack of awareness about MSP and market information as the primary barrier affecting the effectiveness of the MSP scheme.