What is Minimum Support Price?
- It is the Price that is announced by the government especially to support and protect the farmers/Producer.
- It should not be confused with the fact that it is not for providing benefit rather it is meant to support the farmers
- When there is an excessive & abundant supply of commodities i.e glut in market, the demand of the commodity goes down .
- The Producers when comes to market for selling, fails even to recover even the input cost . Under such conditions , MSP provision as kept by government comes in to play .
- As per MSP provision, the government Purchases the Commodity/Produce at a pre announced price and prevent the price of the commodity/produce to go below an optimum level .
Minimum Support Price(MSP) – When it is announced:
- MSP is announced twice per year
- Once before kharif sowing season , other before Rabi sowing season.
Minimum Support Price(MSP) – How the Purchase is channelized:
- Central govt. purchase it through Food Corporation of India(FCI) and other central agencies.
Minimum Support Price(MSP)- Current facts:
- At present, MSP has been announced for 25 Crops
- This year MSP has been increased for majority of Crops
Minimum Support Price(MSP) – Its effect’s on Sowing:
An increase in MSP encourages the farmers to go for more Cropping .This way the net sown area under crops increases .In the current year it has been seen that in :
- Pulses crop – Sowing area has been increased to approx. 115 lakh from approx.102 lakh ha in previous year
- Soybean – Sowing area has been increased to approx.185 lakh ha from approx.177 lakh ha in previous year
- Kharif – Sowing area has been increased to approx.1038 lakh ha from approx.1025 lakh ha in previous year
Minimum Support Price(MSP) -A big Question ?
- If the govt. don’t have significant/adequate numbers of stock/ware houses to purchase & collect the produce of the farmers , Then what’s the use of announcing MSP and that too some time, with a hike .
Minimum Support Price(MSP) -How can it be more effective?
- Along with announcing hike in MSP, suitable arrangements for stock / ware houses to stock the produce should be planned
- By Providing Bonus along with MSP
- Arrangements of Technical inputs
- By use of new Technologies