How is MSP (Minimum Support Price) determined?
The Minimum Support Price (MSP) is determined after taking into consideration various factors related to production costs, market trends, and the overall well-being of farmers. MSP for each crop is determined in the following way:
- There are two major cropping seasons in India: ‘Rabi’ and ‘Kharif and MSP is announced by the government at the start of each cropping season.
- The MSP is determined after the government thoroughly studies the major points raised by the Agricultural Costs and Prices Commission. The Commission for Agricultural Costs and Prices(CACP) calculates and recommends the MSP.
- The CACP uses a comprehensive view of a particular commodity or group of commodities to calculate the MSP. These recommendations are based on pre-set formulae.
- Key factors in determining MSP are the cost of production, which includes various components such as labor, seeds, fertilizers, irrigation, machinery, and other inputs.
- These variables are known as A2, FL, and C2 in technical terms. The CACP uses the formula “A2+FL,” which includes actual paid-out costs (A2) such as seeds, fertilizers, labor, and other expenses, as well as imputed costs (FL) like the value of family labor and land rent. This helps in calculating the total cost of production for each crop. The MSP is calculated by adding all of these.
- The other important factors that are taken into account for calculating MSP are:
- Change in the input costs such as fuel, labor, and fertilizer
- Demand and supply situations both in the domestic and international markets.
- Inflation
- The significance of the crop in terms of food security, nutritional value, and economic importance also influences the MSP price.
- The CACP provides recommendations to the government on MSPs based on the factors mentioned above. The government takes these recommendations into account while announcing the MSPs for each crop.
Minimum Support Price (MSP)
The Minimum support price (MSP) is announced by the government to provide to support farmers and stabilize the agricultural sector. This pivotal policy, relevant for Minimum support price (MSP) UPSC, covers various crops. MSP for food grains was introduced to benefit farmers, and its local implementation impacts communities. Explore the why, how theMSP minimum support price, including the recent Increase in minimum support price (MSP) for rabi crops in 2023. Stay informed with the comprehensive MSP list for different crops in India.
Minimum Support Price is the guaranteed minimum price at which certain agricultural products or crops are purchased from farmers by government agencies. MSP is announced by the government to ensure that farmers receive a fair and remunerative price for their produce, especially in situations where market prices might fall due to various factors such as oversupply, adverse weather, or other market uncertainties. Recently, the MSP 2023-24 list for Kharif and Rabi crops was announced by the government with the hike in the MSP. The increase in the MSP aligns to set the MSP at a minimum of 1.5 times the All-India weighted average Cost of Production, thereby ensuring fair income for farmers.
In this article, you will learn about what is MSP (Minimum Support Price), how it is determined, crops eligible for MSP, challenges faced during MSP, etc.
Table of Content
- What is Minimum Support Price (MSP)?
- How is MSP (Minimum Support Price) determined?
- Minimum Support Price (MSP) is Announced by the Government to Provide
- Minimum Support Price (MSP) UPSC
- Minimum Support Price (MSP) of How Many Crops are Fixed
- The Minimum Support Price (MSP) for Food Grains was Introduced in the Year
- What is Minimum Support Price MSP and How is it Being Implemented in Your Area?
- Why is Minimum Support Price (MSP) for Crops?
- Increase in Minimum Support Price (MSP) for Rabi Crops in 2023
- Who Decides the Minimum Support Price (MSP) for Agricultural Crops in India
- Minimum Support Price List
- MSP (Minimum Support Price)
- Crops Eligible for MSP (Minimum Support Price)
- Challenges Faced during MSP (Minimum Support Price)
- Incorporating MSP (Minimum Support Price) in Agricultural Strategies