Transforming Indian Agriculture: Evolution of Technology, Policy Reforms, and Market Liberalization for Enhancing Farmers' Incomes

Abstract

India's recent farm laws sought to liberalize agricultural markets and attract private investment into infrastructure such as cold chains, warehouses, and aggregation centres. However, concerns about increased exposure to market volatility triggered widespread farmer protests demanding a legally guaranteed Minimum Support Price (MSP). This paper critically analyzes the farm laws using secondary data drawn from government reports and scholarly literatures. It highlights how the MSP policy, while successful in ensuring price assurance for paddy and wheat, has largely excluded pulses and oilseeds, contributing to nutritional imbalances and undernourishment among women and children. Farmers cultivating these neglected crops face market uncertainties, resulting in low profitability, poor production incentives, and a growing reliance on imports. The paper proposes a reformed MSP framework based on a price insurance model. It recommends: (i) continued procurement of paddy and wheat to support food security objectives; (ii) implementation of a Price Deficiency Payment Scheme (PDPS) for the remaining 21 MSP-notified crops; and (iii) using MSP as a signal price to guide production in fragmented markets. The findings underscore the need for a balanced approach that aligns market reforms with inclusive and stable income support mechanisms for farmers.