MSP Full form
MSP full form stands for Minimum support price.
What is MSP?
MSP is a “minimum price” for any crop that the government considers as remunerative for farmers and hence deserving of “support”. It is also the price that Indian government agencies pay whenever they purchase a particular crop.
The Centre Government currently fixes MSPs for 23 farm commodities — 7 cereals (paddy, wheat, maize, bajra, jowar, ragi and barley), 5 pulses (chana, arhar/tur, urad, moong and masur), 7 oilseeds (rapeseed-mustard, groundnut, soyabean, sunflower, sesamum, safflower, and nigerseed) and 4 commercial crops (cotton, sugarcane, copra and raw jute).MSP full form stands for Minimum support price
The prices of agricultural commodities often vary due to many factors. If a crop has seen a good harvest season during a particular year, it may see a sharp fall in its prices. This will lead to farmers withdrawing from sowing the crop in the next year which will affect the supply. To counter this, MSP is fixed by the government which is supposed to encourage higher investments and production of crops.
The MSP is fixed twice a year on the recommendations of the Commission for Agricultural Costs and Prices (CACP), which is a statutory body and submits separate reports recommending prices for Kharif and rabi seasons.
The CACP submits its recommendations to the government in the form of Price Policy Reports every year, separately for five groups of commodities namely kharif crops, rabi crops, sugarcane, raw jute and copra.
After considering the report and views of the state governments and also keeping in view the overall demand and supply situation in the country, the central government takes the final decision to decide the MSP.
History of MSP
During the time of Independence, India was staring at a major deficit in terms of cereal production. After the struggling first decade, India decided to go for immense agricultural reforms. It was the first time in the year 1966-67 that the Minimum Support Price was introduced by the Centre. At Rs 54 per quintal, the MSP for wheat was fixed for the first time. The full form of the MSP stands for Minimum support price.
What was the need of introducing MSP?
On the path to achieving the Green Revolution, Indian policymakers decided that the farmers needed incentives to grow food crops. Otherwise, they won’t opt for crops such as wheat and paddy as they were labor-intensive and didn’t fetch lucrative prices. Hence, to incentivize the farmers and boost production, the MSP was introduced in the 1960s.
Statement Showing Minimum Support Prices – Fixed by Government (Rs.quintal)
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