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 pric
