How can the Indian government design effective support mechanisms for farmers whose incomes are affected by unpredictable global crop prices?

Global crop prices are often volatile due to factors like international demand-supply imbalances, climate events, and geopolitical tensions. Indian farmers, whose incomes are closely tied to these price movements, are especially vulnerable. The government can design several support mechanisms to shield them from such unpredictability:

• Minimum Support Price (MSP) Expansion: Broaden the coverage of MSP to include more crops and ensure timely, effective procurement to provide a price safety net.
• Income Support Schemes: Strengthen and expand direct income support schemes like PM-KISAN, providing regular cash transfers to farmers irrespective of market prices.
• Crop Insurance: Enhance the coverage and efficiency of schemes like Pradhan Mantri Fasal Bima Yojana (PMFBY) to protect against both price and yield volatility.
• Price Stabilization Fund: Create or bolster funds that intervene in markets to stabilize prices during periods of extreme volatility, especially for essential crops.
• Warehouse Receipt Systems: Promote and incentivize scientific storage and warehouse receipt systems, enabling farmers to store produce and sell when prices are favorable.
• Market Intelligence & Digital Platforms: Provide real-time price information and forecasts through digital platforms and mobile apps, helping farmers make informed selling decisions.
• Export Facilitation: Simplify export procedures and provide incentives for crop exports during periods of domestic surplus and low prices.
• Crop Diversification & Value Addition: Encourage farmers to diversify into high-value crops, horticulture, or allied activities, and support agro-processing to reduce dependence on a few crops and low-value markets.
• Contract Farming & Farmer Producer Organizations (FPOs): Promote contract farming and strengthen FPOs to improve bargaining power and reduce risks from price fluctuations.
• International Hedging Mechanisms: Facilitate access to commodity exchanges and global hedging instruments so that farmers or cooperatives can lock in prices in advance.