DMPQ: What is Minimum Support Price? How will MSP rescue the farmers from low income trap?

Minimum support price is the government scheme to safeguard the interest of the farmers. GOI declares the MSP of various agricultural produce and assures the farmers that their agriculture produce will be purchased at the MSP. The Food Corporation of India acts as the Nodal agency of the GoI. MSP scheme is implemented through state agencies. MSP is recommended by the commission for agricultural costs and prices.(CACP) and approved by cabinet committee on economic affairs. The CACP project three kind of production costs for every crop both at the state and all India average. These three kind of production costs are as follows:

  • A2: It covers all paid-out costs directly incurred by the farmer in cash and king on seeds, fertilizers, pesticides, hired labour, leased-in land, fuel, irrigation etc.
  • A2+FL: It includes A2 plus an imputed value of unpaid family labour.
  • C2: It is a more comprehensive cost that factors in rental and interest forgone on owned land and fixed capital assets, on top of A2+FL.

 

When market prices goes down due to excess supply the government assured farmers of minimum assured price. The Government becomes the buyer of the produce. It help to ensure income security for the farmers in the case of lower market prices for market produce. It hence save farmers from debt trap. The money earned can be utilised for further investment and consumption purpose.

BPCS Notes brings Prelims and Mains programs for BPCS Prelims and BPCS Mains Exam preparation. Various Programs initiated by BPCS Notes are as follows:- For any doubt, Just leave us a Chat or Fill us a querry––

Hope we have satisfied your need for BPSC Prelims and Mains Preparation

Kindly review us to serve even better


BPSC Mains Test Series 2022

20 Quality mock tests and GS Mains Notes

Mains Test Series and Notes (With Evaluation and Skill Enhancement)

Mains Printed Notes (With COD)

Mains PDF Notes (Digital)


For Any Suggestion’s and Updates kindly Comments your doubts Here

Subscribe to BPSC Notes

Never Miss any BPSC important update!

Join 8,598 other subscribers
error: Content is protected !!