Minimum support prices and market price dynamics in Indian agriculture

This study analyzes the dynamic linkages between Minimum Support Prices (MSP), cost of production (COP), domestic market prices (DMP), and international prices (IP) in Indian agriculture from 1980–2024, focusing on rice, black gram, groundnut, and cotton. Using compound annual growth rates and rolling regressions, it traces long-term trends and evolving elasticities across policy regimes. Results reveal a structural break in the 1990s with liberalization and WTO entry. Pre-WTO, MSP growth outpaced COP, spurring input intensification and cost–price spirals, while IP influence was muted. Post-WTO, MSP and COP converged, DMPs aligned with costs, and IPs gained importance. Crop-specific patterns show rice increasingly shaped by MSP and IP, black gram marked by volatility and weak procurement, groundnut exposed to global edible oil markets, and cotton benefiting from MSP support and global competitiveness. Policy calls include calibrated MSPs, stronger risk management for pulses, and integrated cotton strategies.