What is a Minimum Support Price (MSP)? Why is a MSP needed?
Answers
Answer:
The minimum support price (MSP) is an agricultural product price, set by the Government of India to purchase directly from the farmer. This is not enforceable by law. By definition, this rate is to safeguard the farmer to a minimum profit for the harvest, if the open market has lesser price than the cost incurred.
Explanation:
MSP is needed for the following reasons:
1. It helps to improve economic access to food to people.
2. It ensures price stability for the farmers by inducing them to increase production, which will ensure the availability of food grains.
3. It introduces a pattern of production which is in correspondence to the overall economic needs.
Answer:
The minimum support price (MSP) is an agricultural product price, set by the Government of India to purchase directly from the farmer. This is not enforceable by law. By definition, this rate is to safeguard the farmer to a minimum profit for the harvest, if the open market has lesser price than the cost incurred.[1] The Indian government sets the price for 23 commodities twice a year.[2][3][4]
MSP is fixed on the recommendations of the Commission for Agricultural Costs and Prices (CACP) since 2009.[5]