what is a minimum support price (msp) . why is MSP needed?
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MSP is price fixed by Government of India to protect the producer - farmers - against excessive fall in price during bumper production years. The minimum support prices are a guarantee price for their produce from the Government.
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Answer:
1) Minimum Support Price is the price at which the farmer can sell their products government or others.
2) This is decided by government every year during reaping time by considering the cost of production and nominal profit of farmer. 3) Traders or government have to purchase agricultural products at this price or more.
4) MSP provides minimum guarantee to the value of crops and farmers can sell crops at more prices according to demand.
5) This prevent traders syndicate of reducing price.
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