Optimize IAS
  • Home
  • About Us
  • Courses
    • Prelims Test Series
      • LAQSHYA 2026 Prelims Mentorship
    • Mains Mentorship
      • Arjuna 2026 Mains Mentorship
  • Portal Login
    • Home
    • About Us
    • Courses
      • Prelims Test Series
        • LAQSHYA 2026 Prelims Mentorship
      • Mains Mentorship
        • Arjuna 2026 Mains Mentorship
    • Portal Login

    MINIMUM SUPPORT PRICE

    • October 7, 2020
    • Posted by: OptimizeIAS Team
    • Category: DPN Topics
    No Comments

    Subject: Economy(agri)

    Context:

    Union Finance Minister Nirmala Sitharaman has reiterated that the minimum support price (MSP) for crops will continue and will not be withdrawn.

    Concept:

    Fixation of MSP

    • The MSP is fixed on the recommendations of the Commission for Agricultural Costs and Prices (CACP).
    • Factors taken into consideration for fixing MSP include:
      • Demand and supply;
      • Cost of production (A2 + FL method)
      • Price trends in the market, both domestic and international;
      • Inter-crop price parity;
      • Terms of trade between agriculture and non-agriculture;
      • A minimum of 50% as the margin over cost of production; and
      • Likely implications of MSP on consumers of that product.
    • The Commission also makes visits to states for on-the-spot assessment of the various constraints that farmers face in marketing their produce, or even raising the productivity levels of their crops.
    • Based on all these inputs, the Commission then finalizes its recommendations/reports, which are then submitted to the government.
    • The government, in turn, circulates the CACP reports to state governments and concerned Central Ministries for their comments.
    • After receiving the feed-back from them, the Cabinet Committee on Economic Affairs (CCEA) of the Union government takes a final decision on the level of MSPs and other recommendations made by the CACP.
    • Procurement: The Food Corporation of India (FCI), the nodal central agency of the Government of India, along with other State Agencies undertakes procurement of crops.
    • Government fixes MSP for 22 mandated crops which are paddy, jowar, bajra, maize, ragi, arhar, moong, urad, groundnut-in-shell, soyabean, sunflower, sesamum, nigerseed, cotton, wheat, barley, gram, masur (lentil), rapeseed / mustard, safflower, jute and copra. In addition, MSP of Toria and de-husked coconut are also fixed on the basis of the MSPs of rapeseed/mustard and copra respectively
    Agriculture economy Minimum Support Price
    Footer logo
    Copyright © 2015 MasterStudy Theme by Stylemix Themes
        Search