Minimum Support Price (MSP)
Minimum Support price is the price at which government purchase crops (Food grains and Non food grains) from farmers, in order to safeguard the interest of the farmers against any sharp fall of farm prices. Government of India announces MSP at the time of sowing season of crops.
Why MSP is for farmers?
As the prices are announced before the crops are ready to harvest, it assures the farmer of getting a minimum price in the market after harvest. It has been done to protect farmers against bumper production because when farm produces will available excess amount in the market then automatically price of farm produces will fell down, so in order to protect the farmers from loss, Government announces MSP. The MSP help to incentivise the farmers and thus ensure adequate amount of food grains and Non food grains production in the country. The MSP are a guarantee price for their produce from the government. This rate is to safeguard the farmers to minimum profit for the harvest, if the open market has lesser price than the cost incurred.
Who declares and prepares it?
The cabinet committee on economic affairs (CCEA), Government of India determine minimum Support price (MSP) OF various agricultural commodities in India based on recommendation of commission for agricultural cost and prices (CACP).
Commodities covered under Minimum Support Price (MSP)
Twenty six (26) commodities are currently covered. They are as follows –
Cereals (seven) –Paddy, Wheat, Barley, Mower, Bajra, Maize and Ragi.
Pulses (five) –Gram, Arhar/Tur, Moong, Urad and lentil.
Oilseeds (eight) – Groundnut, Rapeseed/mustard, Toria, Soyabean, Sunflower seed, Sesamum, Safflower seed and Interested.
Copra, Raw cotton, Sugarcane, Raw jute, De – husked coconut, Virginia flu cured (VFC) tobacco.