{"id":35977,"date":"2024-03-29T05:12:51","date_gmt":"2024-03-29T05:12:51","guid":{"rendered":"https:\/\/edukemy.com\/blog\/?p=35977"},"modified":"2024-03-29T05:12:52","modified_gmt":"2024-03-29T05:12:52","slug":"minimum-support-price-msp-in-india-upsc-economy-notes","status":"publish","type":"post","link":"https:\/\/edukemy.com\/blog\/minimum-support-price-msp-in-india-upsc-economy-notes\/","title":{"rendered":"Minimum Support Price (MSP) in India &#8211; UPSC Economy Notes"},"content":{"rendered":"\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-economy?utm_source=Blog&amp;utm_medium=Banner&amp;utm_campaign=Blog+Economy\" target=\"_blank\" rel=\"noreferrer noopener\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1280\" height=\"300\" src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/17.png\" alt=\"\" class=\"wp-image-42386\" srcset=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/17.png 1280w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/17-1170x274.png 1170w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/17-585x137.png 585w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/><\/a><\/figure>\n\n\n\n<p>The Minimum Support Price (MSP) is a crucial component of India&#8217;s agricultural policy, aimed at providing economic assurance to farmers and promoting agricultural stability. Here are key aspects of the MSP system in India:<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li><strong>The objective of MSP:<\/strong><ul><li>The primary objective of MSP is to assure farmers that their agricultural produce will be bought at a remunerative price, ensuring them a profit for their efforts and encouraging continued investment in agriculture.<\/li><\/ul><\/li><li><strong>Announcement and Purchase Operations:<\/strong><ul><li>The government announces MSP for 24 major agricultural commodities twice a year, before the Kharif (summer) and Rabi (winter) sowing seasons. Purchase operations are organized through public and cooperative agencies.<\/li><\/ul><\/li><li><strong>Role of Food Corporation of India (FCI):<\/strong><ul><li>The Food Corporation of India (FCI) is responsible for actual procurement for the Public Distribution System (PDS) and buffer stock operations. The FCI purchases the produce at the &#8220;procurement price,&#8221; which may see a minor increase to account for inflation between sowing and harvesting times.<\/li><\/ul><\/li><li><strong>Determinants of MSP:<\/strong><ul><li>The MSP is determined based on the recommendations of the Commission for Agricultural Costs and Prices (CACP), an advisory body of the Ministry of Agriculture and Farmers Welfare. The CACP considers various factors, including:<ul><li>Cost of Production<\/li><li>Changes in Input Prices<\/li><li>Input\/Output Price Parity<\/li><li>Market Prices Trends<\/li><li>Inter-crop Price Parity<\/li><li>Demand and Supply Situation<\/li><li>Effect on Industrial Cost Structure<\/li><li>Effect on General Price Level<\/li><li>Effect on Cost of Living<\/li><li>International Market Price Situation<\/li><li>Parity between Prices Paid and Prices Received by farmers (Terms of Trade)<\/li><\/ul><\/li><\/ul><\/li><li><strong>State Government Bonus:<\/strong><ul><li>State governments may add a bonus to the MSP, enhancing the remuneration received by farmers for their produce.<\/li><\/ul><\/li><li><strong>Procurement for PDS and Buffer Stock:<\/strong><ul><li>The procured grains are used for the Public Distribution System, where they are sold at issue prices. FCI&#8217;s economic cost includes procurement, storage, and distribution expenses.<\/li><\/ul><\/li><li><strong>Criticism of MSP:<\/strong><ul><li>Some criticisms of the MSP system include:<ul><li>Promotion of rice and wheat at the expense of crop diversification.<\/li><li>High water consumption by rice and wheat cultivation.<\/li><li>Disproportionate benefits to large farmers, while many are subsistence-based.<\/li><li>Increasing food subsidy burden, prompting calls for rationalization.<\/li><li>Lack of alignment with changing food habits and a growing demand for protein.<\/li><\/ul><\/li><\/ul><\/li><li><strong>Crop Diversification Challenges:<\/strong><ul><li>MSP has been criticized for acting as a hurdle to crop diversification, hindering the shift towards crops aligned with changing dietary preferences.<\/li><\/ul><\/li><\/ol>\n\n\n\n<p>In summary, while the MSP system provides essential support to farmers, it faces scrutiny for its impact on crop patterns, water consumption, and subsidy burden. Balancing the needs of farmers with broader agricultural and economic considerations remains a challenge for policymakers.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_73 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-69ddc7db8edf5\" class=\"ez-toc-cssicon-toggle-label\"><p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-cssicon\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69ddc7db8edf5\"  \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/edukemy.com\/blog\/minimum-support-price-msp-in-india-upsc-economy-notes\/#FAQs\" title=\"FAQs\">FAQs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/edukemy.com\/blog\/minimum-support-price-msp-in-india-upsc-economy-notes\/#Q_What_is_Minimum_Support_Price_MSP_in_India\" title=\"Q: What is Minimum Support Price (MSP) in India?\">Q: What is Minimum Support Price (MSP) in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/edukemy.com\/blog\/minimum-support-price-msp-in-india-upsc-economy-notes\/#Q_How_is_MSP_determined_in_India\" title=\"Q: How is MSP determined in India?\">Q: How is MSP determined in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/edukemy.com\/blog\/minimum-support-price-msp-in-india-upsc-economy-notes\/#Q_Which_crops_are_covered_under_MSP_in_India\" title=\"Q: Which crops are covered under MSP in India?\">Q: Which crops are covered under MSP in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/edukemy.com\/blog\/minimum-support-price-msp-in-india-upsc-economy-notes\/#Q_Why_is_MSP_important_for_Indian_farmers\" title=\"Q: Why is MSP important for Indian farmers?\">Q: Why is MSP important for Indian farmers?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/edukemy.com\/blog\/minimum-support-price-msp-in-india-upsc-economy-notes\/#Q_Are_there_any_criticisms_or_challenges_associated_with_MSP_in_India\" title=\"Q: Are there any criticisms or challenges associated with MSP in India?\">Q: Are there any criticisms or challenges associated with MSP in India?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/edukemy.com\/blog\/minimum-support-price-msp-in-india-upsc-economy-notes\/#In_case_you_still_have_your_doubts_contact_us_on_9811333901\" title=\"In case you still have your doubts, contact us on 9811333901.&nbsp;\">In case you still have your doubts, contact us on 9811333901.&nbsp;<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/edukemy.com\/blog\/minimum-support-price-msp-in-india-upsc-economy-notes\/#Visit_our_YouTube_Channel_%E2%80%93_here\" title=\"Visit our YouTube Channel &#8211;&nbsp;here\">Visit our YouTube Channel &#8211;&nbsp;here<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Q_What_is_Minimum_Support_Price_MSP_in_India\"><\/span>Q: <strong>What is Minimum Support Price (MSP) in India?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The Minimum Support Price (MSP) is a price set by the Indian government to protect farmers against excessive fall in the market prices of agricultural produce. It acts as a safety net ensuring farmers get a fair price for their crops, regardless of market fluctuations.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Q_How_is_MSP_determined_in_India\"><\/span><strong>Q: How is MSP determined in India?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>MSP is determined by the Commission for Agricultural Costs and Prices (CACP), which considers various factors such as cost of production, demand-supply dynamics, market prices, and input costs. Recommendations are made based on these factors and are then approved by the Cabinet Committee on Economic Affairs (CCEA).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Q_Which_crops_are_covered_under_MSP_in_India\"><\/span>Q: <strong>Which crops are covered under MSP in India?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>MSP is announced for various crops including cereals (like rice and wheat), pulses, oilseeds, and some commercial crops like cotton. The government regularly reviews and revises the list of crops eligible for MSP based on factors such as demand, production, and market conditions.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Q_Why_is_MSP_important_for_Indian_farmers\"><\/span>Q: <strong>Why is MSP important for Indian farmers?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>MSP provides assurance to farmers regarding the minimum price they will receive for their produce, which helps in stabilizing their income and encouraging agricultural production. It also serves as a crucial tool for food security and ensures adequate supply of essential commodities in the market.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Q_Are_there_any_criticisms_or_challenges_associated_with_MSP_in_India\"><\/span>Q: <strong>Are there any criticisms or challenges associated with MSP in India?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Yes, there are criticisms and challenges associated with MSP. Some argue that MSP distorts market prices, leads to overproduction of certain crops, and doesn&#8217;t effectively reach all farmers, particularly small and marginalized ones. Additionally, MSP policies can sometimes become politically contentious, leading to debates about their effectiveness and implementation.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-essay?utm_source=Blog&amp;utm_medium=Banner&amp;utm_campaign=Essay\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" data-src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/UPSC-Essay-Course-1280\u00d7300-1-3.svg\" alt=\"\" class=\"wp-image-42688 lazyload\" width=\"781\" height=\"182\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 781px; --smush-placeholder-aspect-ratio: 781\/182;\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"block-c6ab63ae-7083-4831-b519-cb89dacafb18\"><span class=\"ez-toc-section\" id=\"In_case_you_still_have_your_doubts_contact_us_on_9811333901\"><\/span><strong>In case you still have your doubts, contact us on 9811333901.<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p id=\"block-52c5a91b-6ed6-46e3-b781-7cc0c63a0b76\">For UPSC Prelims Resources,&nbsp;<a href=\"https:\/\/edukemy.com\/upsc-cse-prelims-resource-centre\" target=\"_blank\" rel=\"noreferrer noopener\">Click here<\/a><\/p>\n\n\n\n<p id=\"block-d014fe86-d628-49d8-82ce-6c60dc6e7a73\">For Daily Updates and Study Material:<\/p>\n\n\n\n<p id=\"block-38177954-e668-4d8d-b250-d0fbd5a09390\">Join our Telegram Channel &#8211;&nbsp;<a href=\"https:\/\/t.me\/WithEdukemy4IAS\" target=\"_blank\" rel=\"noreferrer noopener\">Edukemy for IAS<\/a><\/p>\n\n\n\n<ul class=\"wp-block-list\" id=\"block-49ca2fe3-109f-4a88-b72e-9df49c3d328e\"><li>1. 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Mains Answer Writing Practice &#8211;&nbsp;<a href=\"https:\/\/bit.ly\/3mZuVxl\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"block-43ccddc1-5348-445f-ab6b-7baaf29fe58d\"><span class=\"ez-toc-section\" id=\"Visit_our_YouTube_Channel_%E2%80%93_here\"><\/span>Visit our YouTube Channel &#8211;&nbsp;<a href=\"https:\/\/www.youtube.com\/@EduKemyforIAS\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><span class=\"ez-toc-section-end\"><\/span><\/h4>\n","protected":false},"excerpt":{"rendered":"<p>The Minimum Support Price (MSP) is a crucial component of India&#8217;s agricultural policy, aimed at providing economic assurance to farmers and promoting agricultural stability. <\/p>\n","protected":false},"author":17,"featured_media":35979,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[209],"tags":[235,1295,232,213,140],"class_list":["post-35977","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy-notes","tag-economy-notes","tag-minimum-support-price","tag-upsc","tag-upsc-notes","tag-upsc_preparation_strategy"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/35977","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/comments?post=35977"}],"version-history":[{"count":1,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/35977\/revisions"}],"predecessor-version":[{"id":35980,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/35977\/revisions\/35980"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/media\/35979"}],"wp:attachment":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/media?parent=35977"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/categories?post=35977"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/tags?post=35977"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}