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Is MSP a Viable Proposition in Marine Fisheries?
The Kerala government, in response to the demands of the fishing community in the state, introduced a minimum support price for fisherfolk’s catch in April 2018. The viability of such a policy, against the present context of the marine fishery marketing in Kerala, has been analysed, and possible policy alternatives have been highlighted.
The authors are grateful to A Gopalakrishnan, Director, Central Marine Fisheries Research Institute and R Narayanakumar, Head, Socioeconomic Evaluation and Technology Transfer Division, CMFRI for their guidance and support in preparing this article.
The views expressed are personal.
The system of minimum support price (MSP) for agricultural commodities1 in India has stood the test of time and continues to be one of the successful price support mechanisms practised in the country.2 Essentially, the MSP acts as a benchmark price below which the state promises to compensate the farmers either through direct procurement or through deficiency payments. Farmers’ produce procured under the scheme are subsequently routed through the public distribution system (PDS) reaching the PDS beneficiaries at subsidised rates. Over and above providing an assured farm income for the tillers of the land, it has played a crucial role in stabilising market prices of essential agricultural commodities and maintaining a strong incentive for the farmers to adopt technologically superior farming practices (Chand 2003). Though criticised on account of creating serious imbalances in the crop-mix, fuelling inflationary pressures and eliciting interregional disparities due to implementation problems (Nayyar 1994; Bharadwaj 1997; Chand 2003; Roy 2018), the food policy centred on the MSP regime remains a strong safety net for the farming community. Inspired by this, there has been a long-standing demand from the fishing community in India to have a system of minimum landing price for the fish caught by the fisherfolk. The Government of Kerala’s announcement in April 2018 to introduce MSP for fishers’ catch (New Indian Express 2018) as a response to the fishers’ demand, is among the first of its kind in the country, and one of the few3 across the maritime countries. Taking cue from this, we undertake a critical appraisal of the proposal and analyse the various pros and cons of going ahead with the plan.
The Case for MSP in Kerala
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