Has the existing MSP policy failed to meet the test of time?
There is a need to work out relative price recommendations. As Chairman APC, as it was then called, we submitted the first single report for the crop season. But it is fair to say that the commission never fully came to grips with the problem of relative price signals and its efforts were of a rough and ready kind. Anyway, the governments intervention was crop and region specific. An econometric unit was set up but the CACP did little formal modelling. In 1982, for instance, we suggested that transport costs should be taken into account for working out wheat intervention measures. This was rejected as too much of a sop to markets. Probably, politics was the real cause. Bihar and MP still suffer in their rice incentives on account of this. We suggested a quality differential to those farmers who grow the Parmal varieties just stabilising then. Dr Bimal Jalan, then in Finance, finally agreed to a token increase as an Alagh factor. It was given up with the Government giving the higher pri
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