Question

How is MSP helpful for farmers

Answer 1

Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices. The minimum support prices are announced by the Government of India at the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).

Answer 2

Cost of production

Changes in input prices

Input-output price parity

Trends in market prices

Demand and supply

Inter-crop price parity

Effect on industrial cost structure

Effect on cost of living

Effect on general price level

International price situation

Parity between prices paid and prices received by the farmers.

Effect on issue prices and implications for subsidy