The Dilemma of Agricultural Price Policy Reforms: Balancing Food Security, Farmers’ Interests, and Sustainability of Natural Resources

Propelled by advancements in agricultural technology, irrigation expansion, infrastructure development, and incentives such as subsidies on inputs and guaranteed purchase of produce at government-determined prices, India’s food system has evolved, transforming the country from a state of food deficit to food surplus. However, this transformation has come at a cost. The incentive structure that contributed to this transformation has now become unsupportive of agricultural sustainability, damaging natural resources, agrobiodiversity, and the environment. This paradoxical situation necessitates a critical examination of current policies and practices. In this study, we evaluated the impact of Minimum Support Prices (MSP), one of the key components of agricultural policy, on crop yields, market prices, farmers’ income, and groundwater levels. The findings demonstrate that MSP-based procurement, by mitigating market uncertainties and price risks, and incentivizing production, serves as an income safety net for farming communities.