Minimum Support Price (MSP)

Related Articles

The Prevention of Sexual Harassment (PoSH) Act

13 hours ago

National Mission on Edible Oils-Oil Palm (NMEO-OP)

14 hours ago

Green Credits and Environmental Sustainability in India

2 days ago

The Government of India sets Minimum Support Price (MSP) for certain agricultural products. MSP is a safety net for farmers that ensures a minimum guaranteed price for their produce. MSP protects farmers from market fluctuations and ensures a fair return on their investment. 

• The MSP is based on a calculation of at least one-and-a-half times the cost of production incurred by the farmers.
• MSP is announced before the sowing season so that farmers can make an informed decision. 

Objectives 

• Support farmers from distress sales at severely low prices
• Procure foodgrains for public distribution
• Incentivize farmers to grow crops that are short in supply

Benefits

• Protects farmers from market fluctuations
• Ensures a fair return on their investment
• Ensures adequate food grain production in the country
• Incentivizes farmers to grow crops that are short in supply
• Has the potential to quadruple farmers’ income

Historical Background

• The Government of India introduced the Minimum Support Price (MSP) in 1966-67.
• The MSP was initially an incentive for farmers to adopt technology and increase agricultural productivity. 
• The MSP was first introduced for wheat and later expanded to include other essential food crops. 
• The MSP was introduced after India faced a major deficit in cereal production at the time of Independence. 
• India was actively looking to shore up its food reserves and prevent shortages during the Green Revolution in the 1960s. 
• The MSP is a “minimum price” for any crop that the government considers as remunerative for farmers and hence deserving of “support”.

Facts

Father of MSP	Dr Frank W Parker
Ministry	Mo Agriculture
Established in	1966
Discovered	K Jha Committee
First crop	Wheat

• The first crop to get an MSP was wheat, which got an MSP fixed at 54 per quintal.
• Now there are presently 23 Crops 
  

Cereals

1. Paddy
2. Wheat
3. Barley
4. Jowar
5. Bajra
6. Maize
7. Ragi
   

Pulses

1. Gram
2. Arhar/tur
3. Moong
4. Urad
5. Lentil
   

Oilseeds

1. Groundnut
2. Rapeseed/mustard
3. Toria
4. Soyabean
5. Sunflower seed
6. Sesamum
7. Safflower seed
8. Niger seed
   

Commercial crops

1. Copra
2. Raw cotton
3. Raw jute
4. De-husked coconut

Agriculture is the backbone of the Indian Economy”- said Mahatma Gandhi. Even today, the situation is still the same, with almost the entire economy being sustained by agriculture, which is the mainstay of the villages. It contributes 16% of the overall GDP and accounts for employment of approximately 52% of the Indian population. Rapid growth in agriculture is essential for the nation’s self-reliance and exports.