The Centre has increased the Minimum Support Price (MSP) for various crops ahead of the upcoming rabi season harvest.
About Minimum Support Price (MSP) system
- MSP is a form of market intervention by the Govt. of India to insure agricultural producers against any sharp fall in farm prices.
- MSP is price fixed by GoI to protect the producer – farmers – against excessive fall in price during bumper production years.
- MSP is announced at the beginning of the sowing season for certain crops on recommendations by Commission for Agricultural Costs and Prices(CACP) and announced by Cabinet Committee on Economic Affairs (CCEA) chaired by the PM of India.
- The major objectives are to support the farmers from distress sales and to procure food grains for public distribution.
- They are a guaranteed price for their produce from the Government.
- In case the market price for the commodity falls below the announced MSP due to bumper production and glut in the market, government agencies purchase the entire quantity offered by the farmers at the announced MSP.
- Government announces minimum support prices (MSPs) for 22 mandated crops and fair and remunerative price (FRP) for sugarcane.
- The mandated crops are 14 crops of the kharif season, 6 rabi crops and two other commercial crops.
- The list of crops is as follows:
- Cereals (7) – paddy, wheat, barley, jowar, bajra, maize and ragi
- Pulses (5) – gram, arhar/tur, moong, urad and lentil
- Oilseeds (8) – groundnut, rapeseed/mustard, toria, soyabean, sunflower seed, sesamum, safflower seed and nigerseed
- Raw cotton
- Raw jute
- De-husked coconut
- Sugarcane (Fair and remunerative price)
- Virginia flu cured (VFC) tobacco