3 min readAug 1, 2026 06:45 AM IST First published on: Aug 1, 2026 at 06:45 AM ISTThe Madhya Pradesh government has seemingly pacified agitating farmers with the assurance that it will procure 60 per cent of their estimated summer moong (green gram) produce, up from the existing 25 per cent limit. This comes even as the crop — sown during March to early-April and harvested by mid-June — is wholesaling in mandis at about Rs 7,000 per quintal, as against the minimum support price (MSP) of Rs 8,768. MP farmers, like those in other states, want the government’s declared MSPs to be not just on paper. The MP government was willing to pay the MSP for up to 1.2 quintals yield per acre, which it has now raised to 3 quintals. Farmers harvesting 6-8 quintals, twice the assessed state average, stand to lose the most on their extra yield sold below the MSP.The demand for MSP as an entitlement is being voiced today by farmers not only in Punjab and Haryana, or those growing rice and wheat. In this case, it is from farmers cultivating crops that aren’t as water and fertiliser-guzzling and also in which the country is significantly import-dependent. A guaranteed MSP for pulses and oilseeds has economic justification, too, especially if it induces the desired acreage shifts in their favour from surplus cereals and sugarcane. But there is a heavy fiscal cost. MP — for that matter, any other state government — clearly does not have the resources to procure and stock all the moong or soyabean brought by farmers for selling at MSP. Governments can, at best, pay the difference between the MSP and the lower market price for the quantity of crops sold in the mandis. Such payment of price difference is preferable even in rice and wheat, where government agencies are holding stocks in excess of the requirements of the public distribution system and welfare schemes.AdvertisementBut neither physical procurement at MSP nor payment of price difference can be a sustainable solution in the interest of Indian agriculture and farmers themselves. Farmers need income, not price support. Once assured of an MIP — minimum income support in the form of a per-acre direct transfer — they will produce those crops that the market wants. Agricultural policy should focus on enabling them to do that by complementing, rather than displacing and distorting markets. MIP, with crop insurance and more public investment in agricultural research and rural infrastructure, is the best support the government can give to Indian farmers. MSPs and input subsidies have been ineffective at best, and market-distorting and fiscally ruinous at worst.