agriculture
The Centre announces MSPs for 22 crops each season, but government buying is concentrated in wheat and rice, mostly from Punjab, Haryana and Madhya Pradesh. Farmer unions, during the 2020–21 protests and again in 2024, demanded a law making it illegal to buy below MSP. Supporters point to distress sales of pulses and oilseeds below MSP; critics point to the cost of guaranteeing prices for every crop and to how procurement has skewed planting towards water-hungry paddy.
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A legal floor protects farmers from distress sales.
Farmers growing pulses, oilseeds and millets often sell below the announced MSP because there is no government buyer in their mandi. A legal right would make the announced price real rather than symbolic.
Farm incomes are volatile and most farmers are smallholders with no buffer. A price floor reduces the risk of a bad market wiping out a season’s investment and debt.
A guarantee covering more crops would encourage farmers to move away from paddy and wheat towards pulses and oilseeds that India imports, if those crops get the same assurance.
Guarantees for every crop would be unaffordable and distort markets.
If the government had to buy or compensate for every crop below MSP, the cost could run into lakhs of crore a year, money that would otherwise go to irrigation, storage or rural roads.
A legal minimum price binding private traders could make them buy less or move to imports when market prices fall, leaving farmers with no buyer at all.
Assured procurement of wheat and rice has already pushed farmers in Punjab and Haryana into water-intensive paddy and lowered groundwater. Extending guarantees could repeat that distortion elsewhere.
Whether the state should carry the price risk that farmers carry today. A legal guarantee would give farmers a floor, but someone must pay when market prices fall below it: either the government (through procurement or price-difference payments) or private buyers (who may then buy less). The answer depends on what it would cost, which crops it covers, and whether it could be designed without locking in today’s crop pattern.
