India’s food and agriculture policies have an aggregate effect of reducing gross farm revenues, a new OECD-Icrier report has said, and estimated that during 2014-16, the reduction was over 6 per cent a year. Even as farmers got large subsidies for inputs like fertilisers, power and irrigation, low market prices for their produce — which are below global levels — resulted in overall negative producer support, the report highlighted, and reckoned that for 2000-16, overall producer support estimate was around —14 per cent on average. At a time the government has pledged that minimum support prices (MSPs) for crops would be 50 per cent above the paid-out costs at the minimum (on Wednesday, the CCEA announced kharif 2018-19 MSPs for 14 crops under this policy), the report proposed a rather contrarian approach. Calling for a system where market signals determine the production choices, it asked for a review of the process where MSPs are set in relation to production costs. This, it said, is necessary to avoid “locking in inefficient high-cost production and raising prices for consumers”. —FE
