JED
  • Home

  • |
  • Announcement

  • |
  • Event

  • |
  • Contact Us

  • Editorial Board

    • Editor-in-Chief
    • Editorial Team
  • Policies & Guidelines

    • Journal Information
    • Guidelines for Authors
    • Guidelines for Reviewers
    • Publication Ethics
  • Online Submission

    • Authors
    • Reviewers
    • Editors
  • Archives

    • Current Issue
    • All Issues
    • Search for Articles
  • Indexing & Abstracting

    • Scopus
    • Web of Science ESCI
    • Asean Citation Index
    • Google Scholar
    • V-CitationGate
    • Crossref
    • DOAJ
    • Cabell's Directories
    • EBSCO Discovery Service
    • ROAD
    • Summons (ProQuest)
    • WorldCat
    • ProQuest Central
    • EconLit

The current issue

Volume 27, Number 1, 2025
Volume 27, Number 1, 2025
Search for Articles
Home / Archives / All Issues / Volume 25, Number 4, 2023
Volume 25, Number 4, 2023 << Back
Journal of Economics and Development, Vol. 25 No. 4, pp. 302-316. https://doi.org/10.1108/JED-04-2023-0079

Does a farmer's knowledge of minimum support price (MSP) affect the farm-gate price? Evidence from India

Aditya Korekallu Srinivasa; K.V. Praveen; Subash Surendran Padmaja; M.L. Nithyashree; Girish K. Jha

Abstract:
Purpose
This paper examines whether farmers' knowledge of the minimum support prices (MSPs) affects farm-gate prices. MSP is the minimum guaranteed price for agricultural commodities announced by the Government of India for 24 commodities. Most farmers in India prefer to sell their produce at the farm-gate due to a small marketable surplus and hence do not directly benefit from MSP. The authors test the common argument in the political discourse that if farmers have knowledge of MSP, then they can bargain with traders during the farm-gate transaction and demand a better price close to MSP.

Design/methodology/approach
The authors use matching methods to examine the impact of knowledge of MSP on farm-gate prices.

Findings
Using nationally representative data, the authors show that there is no empirical evidence that the knowledge of MSP of the crops leads to higher bargaining power and better farm-gate prices.

Practical implications
Price information (MSP in this case) alone cannot improve the bargaining power of farmers and result in a better price realization. As a safety net, MSP fails in the absence of procurement of products by the government. This also raises the question of the equitability of the price support system in India and calls for a rethink of the MSP policy.

Originality/value
This study is the first of its kind to examine the anchoring effect of knowledge of MSP on farm-gate prices using a nationally representative dataset.

Keywords:Minimum support prices, Bargaining, Information asymmetry, On-farm negotiations
Download full text:  

Other articles

  • On the welfare effect of retail electricity subsidy in Vietnam

    Lam Do; Thai-Ha Le

     
  • Is internal migration a way to cope with weather extremes? Evidence from Egypt

    Mohamed Arouri, Adel Ben-Youssef, Cuong Viet Nguyen

     
  • Institutional quality and economic growth in Sub-Saharan Africa: a panel data approach

    Mohammed Seid Hussen

     
  • The interrelationship between corruption and the shadow economy: a perspective on FDI and institutional quality

    Giang Ngo Tinh Nguyen, Xianmin Liu

     
#1406 Building A1, National Economics University, 207 Giai Phong, Hanoi
Tel: +84 (0) 24. 36280280 - Ext: 6407 | Email: submission@ktpt.edu.vn
Publishing License: 159/GP-BTTTT dated 08 May 2023
Copyright © Journal of Economics & Development. All rights reserved