Minimum Support Price (MSP)

1)What is the meaning of Minimum Support Price?

– MSP is the price that is fixed for an agricultural produce such as wheat, cotton, sugarcane etc. That produce cannot be bought directly from the farmers by paying less than this price. This minimum support price is fixed by the Government of India.

2) We can understand this with an example: -

a) Let us assume that the MSP for wheat has been fixed at ₹ 3,000 per quintal;

b) So, a trader can buy wheat from a farmer at Rs 3,100 per quintal but cannot buy wheat at ₹ 2,800 per quintal or ₹ 2,990 per quintal.

3) What is the main advantage of Minimum Support Price?

The advantage of minimum support price is that even if the price of all crops falls according to the market, the central government will buy the crop from the farmers only at the fixed minimum support price so that the farmers to be saved from financial loss.

4) What is the history of MSP? -

After independence, while the country was not able to produce agriculture according to the requirement, the condition of the farmers was also not very good. The farmers were getting a very little price for the crop in return for their hard work and cost. When the grain was produced less, the prices would have gone up too much, and if the grain was produced more, the prices would have gone up too much. To deal with this problem, the Central Government constituted a ‘Food Grain Inquiry Committee’ in 1957. This committee made many suggestions but they did not help much. Then the government thought of fixing the price of agricultural produce. For this, in 1964, the then Prime Minister Lal Bahadur Shastri under the leadership of his secretary Laxmikant Jha formed the ‘Food-Grain Price Committee’ under the ‘Ministry of Food and Agriculture’.

Shastri, who gave the slogan ‘Jai Jawan, Jai Kisan’, believed that farmers should get at least enough money for their produce so that they do not suffer financial loss. The committee presented the proposal to the government on December 24, 1964. On October 19, 1965, B Sivaraman, the then Secretary to the Government of India, put the final seal on the proposal of the committee. After this, for the first time in the year 1966-67, the minimum support price for wheat and paddy was fixed. Since then, the government has been fixing the minimum support price.

5) At present, on how many crops minimum support price is paid by the central government?

At present, the minimum support price is paid by the central government on 23 crops. In which 7 cereals (Paddy, Wheat, Maize, Bajra, Jowar Ragi and Barley), 5 Pulses (Chana, Arhar, Urad, Moong and Lentil), 7 Oilseeds (Rapeseed-Mustard, Groundnut, Soyabean, Sunflower, Sesame, Safflower Nigerseed) and 4 commercial crops (cotton, sugarcane, copra and raw jute). The Minimum Support Price (FRP) for sugarcane crop has been called ‘Fair and Remunerative Price’ (FRP).

Crop	Name Of The Crop
Cereal	Paddy, Wheat, Maize, Bajra, Jowar, Ragi, Barley;
Pulses	Gram, Tur, Urad, Moong, Lentil;

Oilseeds	Rapeseed – Mustard, Peanut, Soybean, Sunflower, Sesame, Safflower, Nigerseed;
Commercial Crops	Cotton, Sugarcane, Copra, Raw Jute;

6) After considering with whom the central government announces the minimum support price?

On the basis of the recommendations of the Commission for Agricultural Costs and Prices, the minimum support price is announced every year by the government for agricultural crops such as cereals, pulses, oilseeds and commercial crops after consideration by the respective state governments and central departments.

7) What is the minimum support price of Rabi crops for the year 2022-23? :-

Crops	MSP 2021-22	MSP 2022–23	Cost of production 2022-23	Increase in the MSP	Return on cost in percent
Wheat	₹ 1975	₹ 2015	₹ 1008	₹ 40	100%
Barley	₹ 1600	₹ 1635	₹ 1019	₹ 35	60%

Gram	₹ 5100	₹ 5230	₹ 3004	₹ 130	74%
Lentil	₹ 5100	₹ 5500	₹ 3079	₹ 400	79%
Mustard	₹ 4650	₹ 5050	₹ 2523	₹ 400	100%
Sunflower flowers	₹ 5327	₹ 5541	₹ 3627	₹ 114	50%

8) Has there been any increase in the Minimum Support Price?

Yes, it has been decided by Prime Minister Narendra Modi to increase the minimum support price of Rabi crops under Rabi season 2022-23. So that farmers can get more income. This order has been taken with the aim of promoting legalization of crops. For flowers of lentil, gram, barley and safflower, farmers will get a higher price than their cost of production. Apart from this, the minimum support price has been fixed in favour of oilseeds, pulses and coarse cereals.