Minimum Support Price for Pulses
- Minimum Support Price (MSP) is a minimum price set by the government for certain agricultural commodities to protect farmers from fluctuations in market prices and ensure a minimum level of income for their produce.
- Simply, the MSP is the rate at which the government buys grains from farmers.
- The MSPs are fixed by the Central government on the recommendations of the Commission for Agricultural Costs and Prices (CACP) under the Ministry of Agriculture.
- After receiving the feedback Cabinet Committee on Economic Affairs (CCEA) of the Union government takes a final decision on the level of MSPs.
- The Food Corporation of India (FCI), the nodal agency, along with other State Agencies undertakes procurement of crops.
- The MSPs are announced before the sowing season by the government.
- The government is not legally bound to pay the MSP to farmers.
- So, though the government encourages the procurement of crops at MSP through its agencies, there is no legal obligation for the government to purchase all crops at MSP or to compensate farmers if market prices fall below the MSP.
- GoI fixes MSPs for 23 farm commodities based on CACP recommendations:
- 7 cereals (paddy, wheat, maize, bajra, jowar, ragi, and barley)
- 5 pulses (chana, arhar/tur, urad, moong, and masur)
- 7 oilseeds (rapeseed-mustard, groundnut, soyabean, sunflower, sesamum, safflower, and nigerseed)
- 4 commercial crops (cotton, sugarcane, copra, and raw jute)
- In addition, GoI also fixes the MSP of toria and de-husked coconut on the basis of the MSPs of rapeseed/mustard and copra respectively.
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