But when we look at the ratio of changes in input cost over the changes in the output price of agricultural commodities received on the basis of CACP data, it has remained flat, indicating that the gains from MSP increases have not accrued to the farm sector in full measure because the costs of inputs have been rising. This may indicate why production growth has not been stronger. What could explain this? One explanation could be that MSPs also drive input costs, so increasing MSPs is like a dog chasing its tail – it can never catch it.
