Describe the problem associated with high minimum support piece of food grains in zigya
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MSP (minimum support price ):- was started as a safety cover for farmers to save them from the dropping prices at the time
of selling their produce. In a particular situation when there is bumper production the prices will fall and the farmer have to
suffer from loss. So government provides them with a minimum price to escape from this loss.
the problem come when the market prices are low and the government is pressurised to raise the MSP. To a certain extent, it won't hamper the economic structure. But when the gap between market price and MSP increases, it creates budget deficit. Because it is a subsidy programme, government has to bear the
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of selling their produce. In a particular situation when there is bumper production the prices will fall and the farmer have to
suffer from loss. So government provides them with a minimum price to escape from this loss.
the problem come when the market prices are low and the government is pressurised to raise the MSP. To a certain extent, it won't hamper the economic structure. But when the gap between market price and MSP increases, it creates budget deficit. Because it is a subsidy programme, government has to bear the
HOPE THIS WILL HELP. PLEASE MARK AS BRAINLIEST AND FOLLOW ME.
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