Subsidies and MSP:It makes most sense for farmers to keep growing rice and wheat

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₹12-17/kg, the higher physical production enables the highest total income for a season. Pulses offer the highest net gain with tur offering up to ₹40/kg and urad ₹30/kg. Moong is lower at ₹22/kg, which is still higher than that earned on wheat and rice.

Among pulses, chana has the highest yield per hectare. But the net income earned is lower than that for tur. In case of oilseeds, groundnut can yield as much as ₹40,000/hectare but would still fall short of wheat by 10%.

Growing groundnut is more lucrative than soybean. Therefore, from a purely commercial perspective, it makes sense for farmers to grow more rice and wheat. It is because of soil and agroclimatic conditions that they cannot be grown in parts of the country other than the rice and wheat-growing belts.

It can also be said that even if pulses, millets or oilseeds are cultivated in the rice and wheat growing belts, it would not make commercial sense. The solution here is that the ecosystem that exists for rice and wheat needs to be replicated for other crops. This would mean having their procurement and distribution.

However, there is no policy for stocking pulses and oilseeds or distributing them through fair price shops on a regular basis. Therefore, a procurement scheme can turn out to be expensive and inefficient as it may only serve the purpose of price stabilization when prices rise in the market. The alternative is to remodel the MSP mechanism, which has long been due.

Having an open-ended procurement system is an anachronism in the current context. There is a need to filter out procurement only to small farmers and not the rich. Also, states need to fix their tolerance limits for subsidizing power and water to ensure that farmers look at other crop