What do you mean by MSP & Explain the problems related to high MSP ?
Answers
Answered by
13
MSP is the minimum support price offered by the government to purchase crops (produce of the crops) from the farmers directly. The government purchases produce related to basic food needs of people in the country. This is done in order to maintain required levels of storage and distribution among people. Also those are used for distribution through public outlets like ration shops (PDS). This policy also helps farmers as an incentive in case of hardships.
Problems:
1. High MSP will drain government of its money/budget.
2. Corruption and mishandling of funds.
3. High support price means purchase of less quantity.
4. High support price means also more inflation and also it means that there are problems related to agriculture/irrigation that are leading to high MSP.
5. High MSP could mean the price may not have been fixed properly, perhaps.
Problems:
1. High MSP will drain government of its money/budget.
2. Corruption and mishandling of funds.
3. High support price means purchase of less quantity.
4. High support price means also more inflation and also it means that there are problems related to agriculture/irrigation that are leading to high MSP.
5. High MSP could mean the price may not have been fixed properly, perhaps.
Answered by
7
The wheat and rice purchases by FCI that is Food Corporation Of India from the farmers in the States where their is surplus production. The farmers are paid a pre-announced price for their crops. This price is called MAP that is Minimum support price.
Problems
Market prices become low.
It creates budget deficit.
hope you like it..........
Problems
Market prices become low.
It creates budget deficit.
hope you like it..........
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