what is MSP in agriculture

MSP in agriculture :

The Minimum Support Price (MSP) is a support system by the Indian Government for farmers. It’s there to protect them from sudden drops in crop prices. The government decides the MSP in agriculture at the start of the planting season based on advice from the Commission for Agricultural Costs and Prices (CACP).

The government’s Price Support Policy aims to protect farmers from sudden drops in crop prices by setting a minimum guaranteed price that acts as a safety net. Before the 1970s, the government had two types of prices for crops:

Minimum Support Prices (MSP): These were long-term guarantees to farmers that their crop prices wouldn’t fall below a certain level, even if there was a bumper crop.

Procurement Prices: These were the prices at which the government bought crops for public distribution. These prices were typically lower than market prices but higher than MSPs.

Initially, this dual-price system applied to paddy (rice) and wheat but was later simplified to just MSPs for rice and other kharif crops, and wheat for buffer stock operations.

Here are the main reasons for MSP:

1.  To help farmers avoid selling their crops at low prices when market conditions aren’t favorable.
2. To buy food grains for public distribution, ensuring a steady food supply.
3. To keep food prices steady and fair for consumers.

MSP mainly covers these crops:

1. Cereals crop :-  Paddy, wheat , Jowar , Barley , Bajra , Ragi , Maize etc.
2. Pulses crops :- Arhar/tur , Gram , Moong , Lentil ,Urade etc.
3. Oilseeds :- Groundnut , rapeseed/mustard ,Soybean ,Toria ,Sesamum , Sunflower seed , Safflower seed , Nigerseed

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