Minimum Support Price (MSP) is the price at which the government purchases crops from farmers to ensure that they receive a fair and guaranteed price for their produce. MSP is announced by the Government of India for various crops before the sowing season to provide farmers with price support.
The MSP is determined based on various factors such as the cost of production, market demand and supply, input prices, and the need to ensure remunerative prices for farmers. MSP is typically announced for major crops like wheat, rice, pulses, oilseeds, and cotton.
The MSP aims to provide price stability, encourage farmers to grow crops that are in national interest, and protect farmers from market fluctuations and price volatility. However, the effectiveness of MSP in achieving these objectives has been a subject of debate, with some critics arguing that it may not reach all farmers or adequately address their needs.
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Overall, MSP plays a crucial role in India’s agricultural policy framework, providing a safety net for farmers and ensuring food security for the nation.