The high yield per hectare of rice and wheat when compared to pulses and oilseeds, and state procurement at assured prices make them commercially more profitable than other crops. An MSP mechanism only for poor farmers and a review of power subsidies can ease this imbalance.
The agricultural landscape in India is quite static. Farmers prefer to grow rice and wheat because of two reasons. The first is that some states subsidize power and water, which helps ensure large scale cultivation.
Second, the Food Corporation of India, which is the procurement agency for the government, has an open-ended scheme under which it buys any amount of rice and wheat at the minimum support price (MSP). This MSP keeps increasing every year as it is based on a cost-plus formula.
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