What is Minimum Support Price?

  • It is the Price that is announced by the government especially to support and protect the farmers/Producer.
  • It should not be confused with the fact that it is not for providing benefit rather it is  meant to support the farmers

    Minimum Support Price(MSP)
    Minimum Support Price(MSP)
  • When there is an excessive & abundant supply of commodities i.e glut in market, the demand of the commodity goes down .
  • The Producers when comes to market for selling, fails even to recover even the input cost  . Under such conditions , MSP  provision as kept by government comes in to play .
  • As per MSP provision, the government Purchases the Commodity/Produce at a pre announced price and prevent the price of the commodity/produce to go below an optimum level .

Minimum Support Price(MSP) – When it is announced:

  • MSP is announced twice per year
  • Once before kharif sowing season , other before Rabi sowing season.


Minimum Support Price(MSP) – How the Purchase is channelized:

  • Central govt. purchase it through Food Corporation of India(FCI) and other central agencies.

Minimum Support Price(MSP)- Current facts: 

  • At present, MSP has been announced for 25 Crops
  • This year MSP has been increased for majority of Crops


Minimum Support Price(MSP) – Its effect’s on Sowing:

An increase in MSP encourages the farmers to go for more Cropping .This way the net  sown area under crops increases .In the current year it has been seen that in :

  • Pulses crop – Sowing area has been increased  to approx. 115 lakh from approx.102 lakh ha in previous year
  • Soybean – Sowing area has been increased  to approx.185 lakh ha  from approx.177 lakh ha in previous year
  • Kharif – Sowing area has been increased  to approx.1038 lakh ha  from approx.1025 lakh ha in previous year

Minimum Support Price(MSP) -A big Question ?

  • If the govt. don’t have significant/adequate numbers of stock/ware houses  to purchase & collect the produce of the farmers , Then what’s the use of announcing  MSP and that too some time, with a hike .

Minimum Support Price(MSP) -How can it be more effective?

  • Along with announcing hike in MSP, suitable arrangements for stock / ware houses to stock the produce should be planned
  • By Providing Bonus along with MSP
  • Arrangements of Technical inputs
  • By use of new Technologies

Originally posted 2016-08-07 13:10:34.