How Put options will complement MSP to lessen government burden, support farmers

Synopsis

The Put options will likely cost much less to the government as compared to MSP. The price risk is transferred from FPOs to market participants, while the exchequer saves on the cost of procurement, carry cost, wastages and investment in warehouse and related infrastructure. It can serve as a tool to make farmers truly Atmanirbhar.

Agriculture as an economic activity is subject to serious risk of natural calamities and price volatility. In short, 2022 will be a tough year for farmers. So far this year, the world has witnessed the Russia-Ukraine war (two of the top five global wheat suppliers) and has been badgered by extreme weather conditions like heatwaves in Europe, wildfires in the US and floods in Australia. In India as well, the southwest monsoon has led to floods in

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