Q69. Consider the following statements
- In the case of all cereals, pulses and oilseeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India.
- In the case of cereals and pulses, the MSP is fixed in any State/UT at a level
to which the market price will never rise.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer: D
- The Minimum Support Price (MSP) is the rate at which the government buys grains from farmers. The MSP is fixed on the recommendations of the Commission for Agricultural Costs and Prices (CACP). The Centre currently fixes MSPs for 23 farm commodities based on the Commission for Agricultural Costs and Prices (CACP) recommendations.
- Statement 1 is not correct: Under the new PM-AASHA scheme, the existing Price Support Scheme (PSS) will continue for pulses, with Central agencies including the NAFED and the Food Corporation of India, physically procuring the produce whenever the market rates fall below MSP, up to a maximum limit of 25% of the total harvest.
- Statement 1 is not correct: While the proposals based on input costs vary from state to state, the MSP is fixed to avoid price inequity. When the market prices dip to a level that is below the MSP, the government agencies buy over the produce in order to protect the farmers. Thus, market prices can rise above MSP.
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