The correct option is (a).
Explanation
The Minimum Support Price (MSP) policy, coupled with assured procurement mechanisms, acts as a critical price signal that influences the allocation of agricultural resources, particularly land, among competing crops.Statement 1 is Correct: In surplus-generating states (such as Punjab and Haryana), the effective implementation of MSP and open-ended procurement for wheat and rice provides farmers with risk-free returns. This financial security has induced a structural shift in cropping patterns, where farmers have diverted land from traditional coarse grains (millets, maize, etc.) to the intensive production of wheat and rice.
Statement 2 is Incorrect: While MSP is announced for pulses and oilseeds, the procurement mechanism for these crops has historically been weaker and less consistent compared to cereals. Consequently, farmers in surplus states have not significantly shifted towards pulses and oilseeds, as these crops entail higher market risk and yield volatility compared to the assured returns of the rice-wheat cycle.
Key Takeaway: The MSP regime has historically skewed agricultural production in favor of cereals (rice and wheat) at the expense of coarse grains, pulses, and oilseeds due to the disparity in effective procurement coverage.