Context:
Parliamentary standing committee on agriculture, animal husbandry and food processing recommends a legally recognized minimum support price for farm produce.
Key Highlights:.
- MSP was one of the core demands of the agitating farmers in 2021, which led to the repealing of the three farm laws and the constitution of a committee on MSP.
- The panel contended that a legal guarantee for MSP would reduce farmer suicides and provide them some financial stability.
The Minimum Support price (MSP)
The minimum support price (MSP) is the minimum price that is set by the Government of India for certain crops to ensure a minimum profit as well as ensuring food security for farmers. The MSP is basically announced at the beginning of the sowing season for crops like wheat and paddy. The government fix the mount of MSP based on recommendations from the Commission for Agricultural Costs and Prices (CACP).
Aim of MSP:
- Protect farmers
- The MSP protects farmers from the rapid drops in farm prices, especially during bumper production years.
- Increase food security
- The MSP helps to increase food security in the country.
- Stabilize prices
- The MSP helps stabilize prices for agricultural products, assuring the affordability to costumers as well.
- Encourage production
- The MSP motivates farmers to increase their agricultural production by providing a fair and respected price for their produce.
The MSP is different from the procurement price and issue price. When the market price for a commodity falls below the MSP, the government buys the entire quantity of food grains by the farmers at the MSP.
