The paper tries to examine the institutional arrangements to enforce the minimum support price (MSP) in India with a special reference to a highly agricultural-producing state, which is also known as the food bowl of India. The current study is based on the Punjab state which is an agriculturally rich state, here, paddy and wheat farmers suffered low losses as compared to other crop cultivators, but they are not separate from losses. These institutional arrangements to enforce the MSP policy examined by studying cost of Production, FHP, MSP, and crop procurement by the government agencies and their benefited farmers of wheat and paddy. The study calculated the percent change in over the period of 2012-13 to 2020-21 of costs data from the Directorate of Economics & Statistics (DES), and this study analysed the procurement data published by the Food Corporation of India (FCI) and the Ministry of Agriculture and Farmers Welfare, Government of India. The percentage analysis is used as a statistical tool for this research, to access the effectiveness of MSP by its institutional arrangements that enforce the MSP effectively. The institutional arrangements to enforcement the MSP of wheat and paddy is found to be effective in Punjab. The MSP seeks to guarantee fair prices for the growers that promote greater investment and output of the produce. The result of the paper revealed that within the time being the cost of production, cost of cultivation, FHP, MSP, and government procurement of wheat and paddy is increasing, whereas the number of benefited farmers has not significantly increased. The findings of this research unravel that wheat and paddy growers of Punjab are getting supported largely due to effective procurement by the government at the MSP. Overall, at the state of Punjab the procurement of wheat and paddy by the government agencies such as FCI and state agencies is satisfactory, and conclude that the institutional arrangements for wheat and paddy procurement at MSP in Punjab is effective in nature.

The study evaluates the efficiency of the Minimum Support Price on paddy cultivation in Punjab. The data spanning from 1996–1997 to 2019–20 on area, production, yield, cost of production, operational cost, different cost components, and MSP of paddy in Punjab were collected from the secondary sources. For this study, data were collected from the Directorate of Economics and Statistics and the Commission for Agricultural Costs and Prices (CACP) underneath the Ministry of Agriculture and Farmers Welfare, Government of India. The descriptive statistics and the Compound Annual Growth Rate (CAGR) were used to analyze the collected data with appropriate analytical tools. The study exposed that the area and production of paddy has significantly increased over the year, whereas the yield has decreased. The findings of the study shows that the relative share of the different inputs, adequacy of the MSP in meeting the cost of production, and the percentage difference between the MSP and different cost components have significantly increased over the period. Therefore, the outcome of the study revealed that the MSP has significantly increased and the MSP for paddy to be found very effective in Punjab state.

This study was conducted to identify the problems and constraints faced by farmers in Punjab in the operation of the Minimum Support Price (MSP) scheme, particularly for the principal crops. The four major crops—wheat, moong, rapeseed & mustard, and cotton were selected to represent the crop groups of cereals, pulses, oilseeds, and commercial crops. Crop selection was based on the highest triennial average gross cropped area within each crop group. A multistage random sampling technique was used to select districts, tehsils, and villages. A total of 320 farmers (80 per crop) were randomly selected, and the required data were collected using a pretested interview schedule. Garrett’s ranking technique was used to analyse the barriers faced by farmers in the MSP scheme. Eight major barriers were identified, including a lack of awareness about MSP and market information, a lack of remunerative prices, delays in procurement, delays in payment, exploitative middlemen, transportation problems, inadequate institutional facilities, and the absence of grievance redressal mechanisms. Among these, the lack of institutional capacity to deliver market services, the lack of remunerative prices, and limited awareness of MSP and market information emerged as the most significant barriers. The results further revealed that the the lack of institutional capacity to deliver market services was the most prominent barrier for moong and rapeseed-mustard growers. In contrast, cotton growers reported a lack of remunerative prices as the major issue, while wheat growers identified a lack of awareness about MSP and market information as the primary barrier affecting the effectiveness of the MSP scheme.

The MSP policy aimed to protect farmers from market volatility and encourage the adoption of modern agricultural practices to enhance production and productivity. The study examined the impact of MSP interventions on crop diversification in the Indian state of Punjab. Data were collected from 320 farmers, which included both MSP participants and non-participants. The results showed that only 43.75 per cent of farmers benefited from the MSP policy. The PSM results revealed a significantly negative impact of MSP on crop diversification, indicating that the policy may discourage diversification in the region. Rosenbaum's sensitivity analysis further confirmed the robustness of the PSM results to potential hidden bias, indicating that the estimated treatment effect remained stable even at higher sensitivity parameters. These findings offered policy makers valuable insights for promoting sustainable agricultural practices. The study recommended expanding the scope of the MSP policy to encourage crop diversification and improve overall farmers' welfare.