MINIMUM SUPPORT PRICE | MSP | MINIMUM SUPPORT PRICE TO FARMERS | ARTICLE ON MINIMUM SUPPORT PRICE | ABSTRACT ON MINIMUM SUPPORT PRICEFARMERS

                                           

                                         MINIMUM SUPPORT PRICE

Minimum Support Price or MSP is an agricultural product price set by the

government of India (GOI) purchase directly from the farmer. This rate is to

safeguard farmer to minimum profit for the harvest, if the one market has lesser price

than the cost incurred.

MINIMUM SUPPORT PRICE

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MSP is a form of market intervention by the government of India to insure

agricultural producer against any sharp fall in the farm prices. The MSP are

announced by the government of India at the beginning of the sowing season for the

certain crop on the basis of the recommendation of the commission for agricultural

costs and prices (CACP).

OBJECTIVES

The major objective are support the farmer from distress sales and to procure food

grains for public distribution.

TYPES OF ADMINISTERED PRICES IN INDIA :-

1. Minimum support price :- MSP served as the floor price and fixed by the

government in the nature of long term guarantee for investment decision of

producer along with the assurance in the case of bumper crop.

2. Procurement prices:- These are the prices of Kharif and Rabi cereals at which

the public distribution system normally procurement prices was lower than the

open market price and higher than the MSP.

MINIMUM SUPPORT PRICE

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CROP COVERED UNDER MSP :-

There are 26 commodities covered like:-

1.Cereals (7) :- Paddy, Wheat, Barley, Jawar, Bajra, Maize and ragi.

2.Pulses (5) :- Gram, Arhar, Moong, Urad and lentils.

3.Oilseed (8) :- Groundnut, Mustard, Safflower seed, Soyabean, Toria

Sunflower seed.

4.Raw cotton

5.Raw jute

6.Copra

7.Dehusked coconut

8.Sugarcane

9. Viginia flu curved (VFC) Tobacco

MINIMUM SUPPORT PRICE

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EXAMPLES:-

In kharif season, let’s say that the government announced as MSP of Rs.1000 per

quintal of rice. Due to a good monsoon, there was a bumper harvest, supply was high

and market prices fell down to Rs.650.

Now, the farmer can sell his rice to the government for the assured price of Rs.1000,

and thereby be protected from the loss that he would have otherwise incurred had he

sold it market.

MSP IS A POLITICAL GIMMICK ?

We cannot call MSP is the political gimmick, we can also call it government

negligence because almost 2/3rd of the total crop production is taken through the

route of MSP, leaving only 1/3rd for open market. As a result, a farmer who choose

the MSP route cannot take advantage of beneficial market price and the farmer is not

getting the money on time.

CONCLUSION:-

We all know India is our agricultural country and the MSP is an important policy of

the GOI to determine floor price of major agricultural produce every year for

protecting the farmer from the middlemen and fluctuating market condition as it

provide them as assured market in addition to a minimum assured return.

Finally, almost all the beneficiaries were unanimous with the view that the MSP

should continue as it insulated them from an unfavourable market condition by

assuring them a minimum return for their produce.