What do you mean by Minimum Support Price (MSP)? How will MSP rescue the farmers from the low income trap?

Structure of Answer:

  • Define MSP.
  • Briefly explain its importance.
  • Discuss the highlights of Budget 2018.
  • Way forward.
  • Conclusion.

Key points:

  • Minimum Support Price is the price at which government purchases crops for the farmers, to safeguard the interests of the farmers. It is an important part of India’s agricultural price policy.
  • It supports the food security program through PDS and also gives sufficient remuneration to the farmers.
  • When market prices fall below the announced MSPs bezoek website, procurement agencies step in to procure the crop and ‘support’ the prices.
  • The FCI and Nafed help the Centre procure select food crops with the help of the States.
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