Minimum Support Price

What is Minimum Support Price?

Minimum Support worth (MSP) could be a type of market intervention by the govt of Asian countries to insure agricultural producers against any sharp fall in farm costs. The minimum support costs square measure proclaimed by the govt of Asian countries at the start of the sowing season surely crop on the premise of the recommendations of the Commission for Agricultural prices and costs (CACP).

MSP is worth mounted by the Government of Asian countries to safeguard the producer – farmers – against excessive fall in worth throughout bumper production years. The minimum support costs square measure a guarantee worth for his or her manufacture from the govt.

Objectives of MSP

• The major objectives square measure to support the farmers from distress sales and to obtain food grains for public distribution.
• Just in case the worth|market value|value} for the goods falls below the proclaimed minimum price because of bumper production and glut within the market, government agencies purchase the whole amount offered by the farmers at the proclaimed minimum value.
• Note: The Price Support Policy of the govt. is directed at providing insurance to agricultural producers against any sharp fall in farm costs. The minimum bonded costs square measure fastened to line a floor below that market costs cannot fall. until the middle Seventies,
• The government declared 2 sorts of administered costs :

1. Minimum Support costs (MSP)
2. Procurement costs

Determination of MSP
In formulating the recommendations in respect of the number of minimum support costs and alternative non-price measures, the Commission takes into consideration, except a comprehensive read of the complete structure of the economy of a specific artifact or cluster of commodities, the subsequent factors:-

• Cost of production
• Changes in input costs
• Input-output worth parity
• Trends in market costs
• Demand and provide
• Inter-crop worth parityThe Commission makes use of each micro-level information and aggregates at the amount of district, state, and country.

The information/data utilized by the Commission, inter-alia embody the following:-

• Cost of cultivation per square measure and structure of prices in varied regions of the country and changes therein
• Cost of production per quintal in varied regions of the country and changes therein;
  Prices of assorted inputs and changes therein
• Market costs of merchandise and changes therein
• Prices within the international market and changes in this demand and provide scenario within the world market
• Prices of the derivatives of the farm merchandise like sugar, jaggery, jute goods
• edible/non-edible oils, and cotton yarn and changes therein
• Cost of the process of agricultural merchandise and changes therein
• Cost of selling – storage, transportation, processing, selling services, taxes/fees.

CropsCovered Under MSP:

The government announces minimum support costs (MSPs) for twenty-two mandated crops and honest and remunerative worth (FRP) for sugarcane. The list of crop area units as follows.

1. Cereals (7) – paddy, wheat, barley, jowar, bajra, maize and African millet
2. Pulses (5) – gram, arhar/tur, moong, urad and lentil
3. Oilseeds (8) – groundnut, rapeseed/mustard, toria, soyabean, edible seed, sesamum, seed and nigerseed
4. Raw cotton
5. Raw jute
6. Copra
7. De-husked coconut
8. Sugarcane (Fair and remunerative price)
9. Virginia influenza cured (VFC) tobacco

MSP for 2020-21

The sowing season in India of crops varies from state to state and the harvesting of the crop also depends on the variety. Thus a harvested crop sown in Kharif may reach in the market even before October.

Commodity	Variety	MSP for 2019-20 (Rs per quintal)	MSP for 2020-2021 (Rs per quintal)	The increase over the previous year (Rs per quintal)
KHARIF CROPS
Paddy	Common	1815	1868	53
	Grade ‘A’	1835	1888	53
Jowar	Hybrid	2550	2620	70
	Maldandi	2570	2640	70
Bajra		2000	2150	150
Maize		1760	1850	90
Ragi		3150	3295	145
Arhar (Tur)		5800	6000	200
Moong		7050	7196	146
Urad		5700	6000	300
Cotton	Medium Staple*	5255	5515	260

 

RABI CROPS (2019-20 season to be marketed in 2020-21)
Wheat		1840	1925	85
Barley		1440	1525	85
Gram		4620	4875	255
Masur (Lentil)		4475	4800	325
Rapeseed & Mustard		4200	4425	225
Safflower		4945	5215	270
Toria		3560	3900	340

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