MSP

Minimum Support Price

 MSP (Minimum Support Price)

 Who decides MSP :-

- Center Government decides the MSP.
- There are two committees of Center Government who is
involved in this :-
 CACP (Commission on Agricultural Cost and Prices ) :- This
committee estimates the Expense of a farmer, which he/she
spends on Growing Crops. And it recommends how much
MSP should CG provide to Farmers this year.
 CCEA (Cabinet Committee on Economic Affairs ) :- This
committee decides the final MSP, that will be given to
farmers on the recommendation of CACP.

 Who Operates this System :-

- APMC

 Which Crops are given MSP :-

- Cereals (7 types)(Wheat, Rice etc..)
- Pulses (5 types)(Moong, udad etc..)
- Oil Seeds (Moongfali, Soyabean etc..)
- Commercial Crops (Raw Jute, Ganna)
- Total of 23 (22+1) Crops are given MSP.
 Which Crops are not given MSP :-
- Fruits
- Vegetables
- Dairy Products
- Fishery Products
- Flowers

 Only 6% of Total Indian Farmers are able to get MSP, as MSP is

not available on all Agri-Produce.

 How this Crops are Sold :-

- APMC,
- Government Procurement (government only buys Wheat, Rice)

 FCI / Corruption.
Debates associated with MSP :-

 Price Fixing Method :-

- How much should be the MSP?
- M.S. Swaminathan Committee :-
1] A2 :- All expense to grow a particular crop. (seeds cost,
fertilizers cost, electricity etc...) = MSP.

2] A2 + FL :- [All things included in A2] + Family Labour

(Labor Cost) = MSP.

3] C2 :- [All expense included in A2 + FL] + Opportunity

cost of that Land (Rent) + Capital (interest) x 1.5% = MSP
(Swaminathan Committee Recommended this way).

 Why MSP on only 23 Crops?

 Corruption (FCI), Wastage.

 Inflation.

 Water (Ecological Enviourment Crises), Crop Pattern(Not

able to Innovate,Research etc..).