Have you ever considered similar strategies, like the MSP(Minimum Support Price) we use to support agriculture in India? If not, this article will help you know similar methods other countries use to support farming.

Why Msp And How Does It Work

Minimum Support Price (MSP) is essential to India’s agricultural policy. The MSP provides the minimum fixed price to the farmers for their crops; this policy protects them from market price disaster, encouraging them to increase their production rate. The government approves the MSP rate depending on factors such as Market Demand Supply, Production Cost and inflation rate.

Every year, the Government declare a fixed price on the recommendation of CACP(Commission for agricultural costs and prices ) for monsoon and winter crops; if, for some reason, the cost of Msp falls below the fixed rate, then the Government takes crops from farmers directly at a fixed price.The Food Corporation of India (FCI) and various state authorities carry out the procurement process. Farmers can sign up to sell their crops at MSP via specific procurement centers.

Different Countries Support Systems Like Msp in India’s Agriculture

Many nations utilize agricultural price support systems identical to India’s Minimum Support Price (MSP), each customized to their unique socio-economic and political environments. Here are essential strategies:

1. USA

The United States utilizes a price stabilization system via the Commodity Credit Corporation (CCC). The CCC obtains crops such as grains at set support prices during price downturns, holding them in storage to sell when prices rise above a certain threshold (e.g., 140% of the support price). This system safeguards farmers from falling prices while avoiding sharp increases for consumers.

2. European Union

• Go eco-friendly and get more money; this policy in the EU encourages farmers to adopt sustainable practices in agriculture.
• During the time of disaster or helping small farmer grow, the EU has proven to be reliable in providing cash to their struggling farmers.
• In India, Msp in agriculture is given at a fixed price, ignoring the negative impact on environmental health. In contrast, in the EU, they primarily focus on farmers’ growth and sustainable practices.

3. Japan

• In Japan, the government also guarantees a fixed price for staple crops, which is very similar to Msp in India agriculture. Still, farmers in Japan get a direct payment from the government as a stable income.
• Farmers in Japan don’t have to worry about the market price falling in the case of rice cultivation; the government is still going to make direct payments to support them.
• Japanese farmers get a subsidy to produce alternative crops instead of rice to avoid overproduction.
• Sustainable practices in agriculture, loans, and other technical advice are also provided by cooperative authorities to help farmers in Japan.

4. South Korea

• South Korea also applies different policies to support farmers, like MSP in agriculture in india. In South Korea, if the market price falls below the announced price of the government. The government will pay 85% of the difference between the fallen amount to help farmers with stable incomes.
• To guarantee steady revenues, the government gives farmers direct payments and subsidies, particularly to those who own registered farms. Farmers can concentrate on sustainable practices, buy fertilizers or adapt to smart farming to enhance production.
• Despite providing subsidies or direct payment to help farmers buy fertilizers, South Korea’s Eco-friendly Agriculture Promotion Act also encourages farmers to adopt sustainable farming.

5. New zealand

• In the 1980s, New Zealand said no to agricultural subsidies and minimum support prices.
• Farmers are urged to compete internationally and increase production output by using creative and eco-friendly methods. The government of New Zealand does not provide an MSP in agriculture support like India or other countries.
• A Relief payment is made during natural disasters such as floods or droughts, but New Zealand does not provide any benefits in terms of price fluctuation in the market.
• To assist farmers in overcoming obstacles and enhancing their operations, the government funds agricultural research, education, and technology.

6. Norway

• With government assistance programs for farmers, Norway offers significant financial support to its farmers by providing 59% of its revenue to the agriculture sector.
• Market price support accounts for a sizable amount (44%) of producer assistance, which includes policies that maintain domestic prices above global market prices.
• Direct payment and tax relief are provided to Noorway farmers, which encourages them to adopt sustainable farming.

Conclusion

Farmers benefit financially from Minimum Support Price (MSP) in agriculture, which guarantee fair prices even if there is a crisis in market rates. MSP-like techniques are used by nations such as China, Brazil, Bangladesh, India, Pakistan, and Thailand to stabilize the incomes of staple crops.

Farmers still face difficulties if MSPs are set too low. It can result in the overproduction of staples like rice while ignoring pulses or vegetables. To help farmers sustainably, nations like the EU and Norway use strategies that combine direct payments and subsidies, which encourage them to adopt eco-friendly farming.