What is the MSP (Minimum Support Price)?

 

MSP (Minimum Support Price) is the minimum price guarantee for agricultural produce in India. The MSP is announced by the Government of India at the beginning of the sowing season for certain crops, to provide a guarantee to the farmers that no matter how much food grains are produced in the country, farmers will get a fixed price for their crop. Thus, the MSP motivates farmers to harvest more crops.

 

How many crops are declared MSP (Minimum Support Price)?

 

The minimum support price for 22 crops are declared by the 'Department of Agriculture and Cooperation, Government of India' on the recommendations of the Agricultural Costs and Prices Commission (CACP) in India. Of these 22 crops, there are 6 rabi crops, 14 kharif season crops, and two other commercial crops. Their description is as follows; Cereals (7), wheat, paddy, millet, barley, jowar, ragi and maize; While 5 crops of pulses are as follows; There are 8 crops of arhar, gram, urad, moong, and lentils and oilseeds. These are crops; Rapeseed/mustard, groundnut, soybean, rapeseed, sesame, saffron seed, sunflower seed and nigerseed.

 

MSP (Minimum Support Price) How to decide?

 

The Commission for Agricultural Costs and Prices (CACP) takes into account several factors while deciding the MSP of Rabi and Kharif crops. These factors are;

 

The price must be set at least 50% higher than the cost of production, demand and supply of food grains, changes in input prices, input-output price parity, what will be the impact on the cost of living, effect on the normal price level, market Price trends, parity between prices received by farmers and prices paid by them, and international price situation.