Minimum Support Price – What is MSP? – Meaning & Full Form

In this article, we have added all details related to the Minimum Support Price. Further, you will find information on the MSP meaning, full form, MSP important for the UPSC exam. Besides, as you are already aware of the IAS exam syllabus, one needs to cover the full syllabus to get the best results in the IAS exam. Besides, this particular exam will check your dedication and hard work towards your goals, along with your subject knowledge. Further, competition is very high for this exam, as we have seen many candidates applying for the IAS every year. Therefore, there are only some students who will be able to clear the exam in the end.

Introduction

To begin with, MSP’s full form is Minimum Support Price, which is an agricultural product price that the Government of India sets to purchase from the farmer. Further, this rate is to safeguard the farmer to the minimum profit for the harvest.

The objectives of setting up MSP are:

1. Support farmers from distress sales
2. To procure food grains for public distribution

MSP meaning

Now let us understand the meaning of the MSP. On Sept 9, 2021, the Central Government hiked the MSP for Rabi crops, including wheat, mustard, safflower, masoor (lentil) dal, Rapeseed, and Chana or gram.

1. In the first place, MSP is the rate which the government buys the crops from the farmers. Further, based on the calculation of atleast one-and-a-half times the cost of production incurred by the farmers.
2. Besides, MSP is a minimum price for any crop that the government considers as a remunerative for farmers and hence deserving of “support”.

Determinants of MSP

• demand and supply
• cost of production
• price trends in the market, in domestic and international
• inter-crop price parity
• terms of trade between agriculture and non-agriculture
• the minimum of 50 % as the margin over cost of production and
• likely implications of Minimum Support Price on consumers of that product.

Factors for Recommending the MSP

1. To begin with the CACP considers various factors while recommending the MSP for a commodity, including cost of cultivation.
2. Further, it takes into the supply and demand situation for the commodity, like market price trends (domestic &global) and parity other crops, implications for consumers (inflation), environment (soil & water use), in terms of trade between non- agriculture and agriculture sectors.

Minimum Support Price

Below we have mentioned the crops that are getting minimum support price. Currently, 23 crops are being supported by the center by fixing MSP. They belong to the family of cereals, pulses, oilseeds, and commercial crops.

• Paddy
• Jowar
• Bajra
• Maize
• Ragi
• Tur (Arhar)
• Moong
• Urad
• Cotton
• Groundnut
• Sunflower seed
• Soya bean
• Sesamum
• Niger seed
• Wheat
• Barley
• Gram
• Masur (Lentil)
• Rapeseed and Mustard
• Safflower
• Toria
• Jute
• Coconut – Copra and De-Husked Coconut

Why MSP is required?

Below we have added all details on why MSP is required. Know the below points.

• In the first place, to secure farmers from the market price fluctuations.
• Further, farm commodities’ prices depend on various factors, such as good harvest season, which leads to a fall in prices.
• Besides, in such cases, farmers may not prefer to sow the crop above the next season. MSPs would encourage farmers to sow these crops and thereby maintain a healthy supply.

Facts about the Minimum Support Price

• Even though the government announces MSP for 23 crops and 2 – 3 crops are effectively procured.
• Further, the rice and wheat production greatly increased by the expense of other crops like pulses.
• Besides, other steps like enhancing the irrigation facilities, land reforms, and access to technology are necessary to make farming more remunerative to farmers.
• Later, in implementing different suggestions given by the Swaminathan commission would be the right step instead of considering MSP as the panacea.

Significance of MSP Hike

• The focus was added to the Nutri-rich Nutri-cereals is to incentivize its production in the areas where rice-wheat cannot be grown without long-term adverse implications for groundwater table.
• Over the years, efforts have been made to realign the MSPs in favor of oilseeds, pulses and coarse cereals. Further, to encourage farmers to shift to larger areas under these crops and adopt the best technologies and farm practices for the correct demand-supply imbalance.

Problems related to the MSP

Now you have some idea on the MSP. Below we have listed some of the problems that are related to the MSP.

1. In the first place, one of the main problem is from insufficient supply of the machinery for procurement for all crops except wheat and rice, which the Food Corporation of India actively procures under the PDS.
2. Further, as state governments procure the last mile grain, the farmers of states where the grain is procured completely by the government profit more while those in states that procure less are often affected.
3. The Minimum Support Price based procurement system is also dependent on middlemen, commission agents and APMC officials, which smaller farmers find difficult to get access to.

Crops that come under MSP

Cereals –

• Paddy
• wheat
• Jowar
• Barley
• Bajra
• Ragi
• Maize

Oilseeds

• Groundnut
• rapeseed/mustard
• Soybean
• Toria
• Sesamum
• Sunflower seed
• Safflower seed
• Nigerseed

Commission for Agricultural Costs and Prices

Further, the Commission for Agricultural Costs and Prices (CACP) is responsible for deciding the minimum support price taking into based on the following factors.

• Demand and Supply
• Cost of production
• Alteration in input prices
• Input-output price parity
• Trends in market prices
• Inter-crop price parity
• Effect on industrial cost structure
• Effect on the general price level
• International price situation
• Parity between prices paid and prices received by the farmers
• Effect on the cost of living
• Effect on issue prices and implications for subsidy and The entire structure of the economy of a particular commodity or group of commodities

Details on the IAS exam

Later, now you have understood the entire details of the Minimum Support Price. Then, it is time to understand the IAS exam and MSP important for the UPSC exam. Further, as we all know about the IAS exam is one of the challenging exams present in India. It isn’t easy because of the vast syllabus. Further, for more details on the IAS exam like exam syllabus, pattern, books, and tips. Click Here. Besides, there are three main stages in the IAS exam: the preliminary exam, the main exam, and the interview round. Therefore, one needs to clear all stages of the exam to get selected for the training.

Later, in the prelims, there are objective type questions, and in the main paper, there are questions that are descriptive type. Thus, there are nine papers in the main paper. Further, if you clear the main exam, you are required to give an interview round.

Conclusion – Minimum Support Price

To conclude, in this article, we have added all information related to the Minimum Support Price and MSP full form, meaning, important for the UPSC exam. Later, one must cover each and every topic for the IAS exam. As it is not like any other exam, you have to be dedicated to your goal. Further, one must make a proper plan and effective timetable. It will all help you in getting the best results in the exam. Later, many platforms allow you with exam preparations. Besides, one can be joining IAS coaching they are present in various cities. However, it depends from one person to the other, and there are a few who study on their own for the exams. In the end, what matters is your hard work and patience. We wish you good luck with the IAS exam. Do hard work and put in all special efforts.

Later, for more information on the IAS exam and the UPSC. Read More. It is important for one to visit the official website to understand all information related to the IAS exam. You will understand exam eligibility, exam date, and other information.

FAQs – Minimum Support Price

Lastly, check out some FAQs for more details on the MSP essential for the UPSC exam.

Editor’s Note | Minimum Support Price

In brief, in this article, we have added all details related to the Minimum Support Price, MSP meaning, full form, and MSP important for the UPSC exam. Later, it isn’t easy to cover all the topics, as important for the UPSC exam. You can try to read some good textbooks or there are platforms that have covered all topics that is essential for the IAS exam. You will also find important links that will also help you with the IAS exam preparations. So, make a proper plan and prepare well for the IAS exam. Finally, we wish you good luck with the UPSC exams.