Question

How MSP helps to farmers ?
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Answer 1

MSP is the minimum price at which the govt guarantees to purchase the farmer's produce, no matter what the market price is. MSP is announced at the beginning of the agricultural seasons - Rabi (winter) and Kharif (rainy) seasons. As the prices are announced before the crops are ready to harvest, it assures the farmer of getting a minimum price from the govt and not worry about the prices in the market after harvest.

Example -

In 2015 Kharif season, let's say that the govt announced an 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 govt for the assured price of Rs. 1000, and thereby be protected from the loss that he would have otherwise incurred had he sold it in market.

Hope this helps ☺️☺️☺️