Kisan Diwas 2025 & MSP Debate – Issues, Impact and the Way Forward

Kisan Diwas, observed every year on 23 December, marks the birth anniversary of former Prime Minister Chaudhary Charan Singh, a leader closely associated with farmers’ welfare. In Kisan Diwas 2025, the discussion around farmers’ issues is once again dominated by the Minimum Support Price (MSP) debate, making it highly relevant for civil services aspirants.

The MSP issue is not just about crop prices; it is deeply linked with rural livelihoods, food security, fiscal policy, federalism, and agricultural reforms. Understanding this debate is essential for a balanced UPSC answer.

Importance of Kisan Diwas in Modern India

Kisan Diwas is more than just a symbol. It shows:

• The key role of farming in India's economy

• The socio-political significance of farmers

• The ongoing difficulties in agrarian reforms

Even in 2025, farming supports a lot of people, so taking care of farmers is an important part of running the country.

Understanding the Minimum Support Price (MSP)

What does MSP mean?

The government sets a minimum support price (MSP) for certain crops and promises to buy them from farmers if the market price falls below this level.

The goal is to:

• Keep prices stable for farmers

• Make sure you get paid back

• Help grow important crops

The Cabinet Committee on Economic Affairs and the Commission for Agricultural Costs and Prices (CACP) both support MSP.

Crops that MSP Covers

MSP is now available for 23 crops, such as:

• Cereals: wheat, rice, corn

• Pulses: gram, tur, moong

• Oilseeds: mustard, soybeans

• Commercial crops: cotton and sugarcane through FRP

But good procurement is mostly limited to rice and wheat.

Why is the MSP Debate Getting More Heated in 2025?

The cost of growing is going up

Farmers' costs are going up because of:

• Fertilizers and pesticides that cost a lot

• The cost of diesel and electricity is going up

• Crop losses due to climate change

A lot of farmers say that MSP doesn't accurately show the real costs of inputs.

Request for a Legal Guarantee of MSP

One of the main things that farmer unions want is:

• Statutory support for MSP, which makes it legally binding

Farmers are worried that MSP is just a policy announcement and not a real safety net without legal protection.

MSP benefits are not available to everyone equally

What really happens on the ground:

• Only 6–7% of farmers get direct benefits from MSP procurement

• Small and marginal farmers often sell for less than MSP

• The imbalance in the region favors Punjab, Haryana, and western UP

This makes people wonder about fairness and inclusion.

What the Government Thinks About MSP

The government has always said that:

• MSP is going up all the time

• Over the years, the levels of procurement have gone up

• MSP is guaranteed to be at least 1.5 times the cost of production (A2+FL)

It also says that:

• MSP being legal could mess up markets

• It might make the tax burden heavier

• It might make farmers less likely to grow different kinds of crops

Legal MSP's Effects on the Economy and Fiscal Stress

If MSP were legally binding for all crops, it would:

• Raise the costs of government buying

• Put more pressure on bills for food subsidies

• Make fiscal deficits worse

This is a big problem for the stability of the economy as a whole.

Changes in the Market

A legal MSP might:

• Lower the amount of private market participation

• Push for too much MSP-backed crop production

• Ignore signals of demand and supply

This could hurt the long-term efficiency of farming.

Effect on Crop Diversity

India is already having trouble with:

• Too much rice and wheat farming

• Depletion of groundwater

• Soil damage

So a strict MSP system could make these problems worse.

The Real Question: MSP and Farmers' Income

MSP helps farmers get the price they want, but it can't double their income on its own.

Structural issues include:

• Fragmented landholdings

• Not very productive

• Not being able to get to the market

• Limited value addition

Focusing only on MSP ignores these deeper challenges.

Alternative and Complementary Reforms

Strengthening Agricultural Markets

• Expansion of e-NAM

• Better rural storage and logistics

• Transparent price discovery mechanisms

This helps farmers get better prices beyond MSP.

Crop Diversification Incentives

• MSP-like price support for pulses and oilseeds

• Direct income support for diversification

• Promotion of climate-resilient crops

This aligns farmer welfare with sustainability.

Direct Income Support

Schemes like PM-KISAN provide:

• Income security without market distortion

• Wider coverage compared to MSP

Such schemes can complement MSP effectively.

Kisan Diwas 2025: A Moment for Policy Reflection

Kisan Diwas 2025 should move beyond symbolism and focus on:

• Balanced MSP reforms

• Sustainable agriculture

• Farmer-centric governance

The MSP debate reflects a deeper trust deficit between farmers and policymakers that needs constructive dialogue.

Way Forward: A Balanced Approach

A pragmatic solution may include:

• Continuing MSP as a safety net

• Improving procurement efficiency for non-cereal crops

• Avoiding blanket legalisation

• Strengthening market reforms and income support

UPSC expects nuanced answers—not binary positions.

Conclusion

The debate around MSP during Kisan Diwas 2025 highlights the complexities of Indian agriculture. MSP remains an important instrument, but it cannot be the sole solution to farmers’ distress. A mix of price support, income security, market reforms, and sustainable practices is essential.

For future administrators, the challenge lies in balancing farmer welfare, fiscal prudence, and environmental sustainability—not choosing one over the other.

FAQs

1. Why is Kisan Diwas celebrated on 23 December?
It marks the birth anniversary of Chaudhary Charan Singh, a leader associated with agrarian reforms.

2. What is the main demand in the MSP debate?
Farmers demand a legal guarantee for MSP to ensure assured procurement.

3. Does MSP benefit all farmers equally?
No. Its benefits are regionally skewed and mainly limited to wheat and rice farmers.

4. Why is the government hesitant to legalise MSP?
Due to concerns about fiscal burden, market distortion, and crop imbalance.

5. How is this topic relevant for UPSC?
It covers GS Paper 3 (Agriculture, Economy), Essay Paper, and is relevant for interviews.