Does a farmer's knowledge of minimum support price (MSP) affect the farm-gate price? Evidence from India

Purpose This paper examines whether farmers' knowledge of the minimum support prices (MSPs) affects farm-gate prices. MSP is guaranteed price for agricultural commodities announced by Government India 24 commodities. Most farmers in prefer to sell their produce at due a small marketable surplus and hence do not directly benefit from MSP. The authors test common argument political discourse that if have MSP, then they can bargain with traders during transaction demand better close Design/methodology/approach use matching methods examine impact on Findings Using nationally representative data, show there no empirical evidence crops leads higher bargaining power Practical implications Price information (MSP this case) alone cannot improve result realization. As safety net, fails absence procurement products government. also raises question equitability system calls rethink policy. Originality/value study first its kind anchoring effect using dataset.