Markets for agricultural produces in India are mostly unorganized and distorted where farmers are often scrupulously exploited. Also since the elasticity of demand for agricultural commodities particularly foodgrains is less than unit in most cases, increased production during the period of pumper harvest brings down the prices of agricultural commodities sharply that severely harms the farmers. Keeping this in view, the support price scheme has been implemented on a regular basis for paddy and othercrops since 1965 in India. However, the support price provided to paddy has come under severe scrutiny and attack for various reasons in recent years. Farmers have been demanding for higher support price for paddy citing that the support price is not even adequate to cover the cost of cultivation. On the other hand, some economists argue that increase of paddy price is “dirty economics and dirtier politics ”. Since paddy is the majorfoodgrain crop supporting the livelihood of large number of farmersbesides helping to sustain the food security of India, an attempt is made in this study to answers the questions such as: Has the support price scheme helped the paddy cultivating farmers in terms of increasing their income? What is the trend in supportprice of paddy vis-a-vis other crops? Has the trend in support price of paddy changed in the recent years given the increased cost of cultivation? What is the level of procurement of paddy at the national and across the states in India? Is it correct tosay that the support price is not remunerative to paddy farmers belonging to high and low productivity states? Secondary level data from 1965-66 to 2010-11 has been used for this study.
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