What is a Minimum Support Price (MSP)? Why is a MSP needed?
SCERT Telangana Class 9 Social Studies Ch 6 Agriculture in India
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Answered by
18
It is market intervention strategy by Indian's government that helps insure Indian farmers against drastic market prices.
Minimum support price is needed due to the following reasons:
1) Ensures that farmers earn a fairly stable income even during bumper harvests.
2) Helps maintain a steady supply of farm produce since farmers are encouraged to produce more even when market prices are projected to experience sharp market falls.
3) Farmers have enough incentive to improve the technology used, ensuring maximal crop production.
Minimum support price is needed due to the following reasons:
1) Ensures that farmers earn a fairly stable income even during bumper harvests.
2) Helps maintain a steady supply of farm produce since farmers are encouraged to produce more even when market prices are projected to experience sharp market falls.
3) Farmers have enough incentive to improve the technology used, ensuring maximal crop production.
Answered by
8
MSP is a price at which government purchases crops from the farmers, whatever may be price for the crops. MSP is an important part of India 's agricultural price policy.
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