MSP Full Form – What Is MSP, Definition, Meaning, Uses

MSP Full Form Friends, in this article, we’ll look at the full form of the MSP. Which is given to every farmer in exchange for his crop’s production. Farmers frequently lose money due to low crop prices, which is why, through support pricing, farmers will be able to collect the crop price at the minimum support price, even if the market price is low. Farmers will not have to incur losses due to market volatility if they receive the Minimum Support Price, which is why every farmer demands MSP.

MSP Full Form  

MSP full form is Minimum Support Price. The Indian government uses market intervention to protect agricultural producers against a significant drop in agricultural prices. The Government of India announces the Minimum Support Price for particular crops at the start of the sowing season, based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). MSP is the price set by the Indian government to shield farmers and producers from sharp price drops during bumper output years.

MSP: Minimum Support Price

MSP Full Form  
MSP Full Form

What exactly is MSP?

As you may be aware, India is an agricultural country, and the Minimum Support Price (MSP) is the price set by the government for crops at which the government purchases farmers’ crops. Simply put, a crop’s Minimum Support Price (MSP) is the price at which the government guarantees to buy the farmers’ crops. No one can pay less than MSP for a farmer’s crop.

The Minimum Support Price (MSP) is a government measure that was initiated by the British government for the benefit of farmers. The primary motivation for enacting MSP was to protect farmers from middlemen’s exploitation. Farmers no longer have to worry about their income now that MSP has arrived because they will receive MSP regardless of how much the price of crops fluctuates in the market.

You are all aware of the farmers’ movement, in which the country’s farmers demanded that the government enact tight legislation on the minimum support price. The government buys farmers’ crops at MSP to offer rations to the citizens of the country (Minimum Support Price).

What is the Support Price Minimum?

In 1966-67, the Center introduced the Minimum Support Price or MSP. This occurred after India’s foodgrain production suffered a severe deficit shortly after independence. The population’s strong demand was not met by the poor production.

After more than a decade of struggle, the Indian government has finally decided to implement substantial agricultural reforms. The Minimum Support Price, or MSP, was introduced as the first step toward agricultural reform. Farmers have a safety net in the form of the Minimum Support Price (MSP), which strives to safeguard them against the market and natural uncertainties.

The Minimum Support Price, or MSP, was a watershed moment for India’s agriculture business, changing the country from a food deficit to a food surplus. Since then, MSP has been critical in assisting farmers in avoiding financial risk.

As the Green Revolution progressed, it became clear that Indian farmers needed more incentives to grow food crops. This was vital, especially when cultivating labor-intensive crops like wheat and paddy. As a result, the Center decided to introduce the Minimum Support Price, or MSP, to provide stronger incentives to farmers, which will help enhance production. Wheat was the first crop to be fixed with MSP, which was set at MSP 54 per quintal.

There are now 23 crops that receive MSP. Millets, wheat, maize, paddy, barley, ragi, and jowar; pulses such as tur, gram, urad, moong, and lentils; oilseeds such as safflower, mustard, Niger seed, soybean, peanut, sesame, and sunflower; and pulses such as tur, gram, urad, moong, and lentils. Commercial crops such as cotton, copra, raw jute, and sugarcane are also given a Minimum Support Price or MSP.

MSP’s main goal

The primary motivation for establishing a minimum support price is to safeguard farmers from middlemen exploitation and to ensure that they receive a fair price for their produce. If the price of a crop goes below the fixed price owing to market excess, the government will purchase it at MSP. MSP’s major goal is to compensate farmers fairly for their efforts, allowing them to live comfortably and focus on the harvests ahead of them.

When did MSP first begin?

The Government of India approved MSP (Minimum Support Price) in 1964, however it was not implemented that year. The MSP was signed and sealed by the Secretary to the Government of India in 1965. Let me explain: the Minimum Support Price (MSP) was originally set for the wheat harvest in 1967, and then gradually the MSP for other crops began to fold as well.

Who decides on the MSP?

CACP (Commission for Agriculture Cost and Prices), a government of India institution, determines MSP. In Hindi, CACP stands for Agricultural Cost and Price Commission. That is, one may argue that the CACP determines the price first, and then the government sets the MSP.

CACP is a government-run entity that reports to the country’s Ministry of Agriculture. It was founded in 1695 and was previously known as the Agricultural Price Commission. In today’s world, the CACP is made up of a president, one official member, and two non-official members. It also contains a secretary’s position.

How is MSP calculated?

MSP is calculated by taking into account several factors, including the following:

  • The MSP is calculated by taking into account the crops grown in various states of India, as well as the number of hectares on which that choice is made.
  • The MSP is calculated based on the market price and demand for the crop.
  • The MSP is calculated based on the number of citizens in the country and the number of food grains consumed by each family.
  • The cost of seeding through harvesting is also taken into consideration.
  • Demand, supply, and price trends for grains.
  • MSP is calculated based on food grain storage, transit costs from one location to another, taxes, mandis taxes, and advantages and drawbacks.
  • MSP is reliant on government storage facilities such as the Food Corporation of India and the National Agriculture Cooperative Marketing Federation.

Crops that are covered under the MSP

The minimum support price for specific crops is set by the central government based on the trends of the Commission for Agricultural Costs and Prices. Only 22-23 crops are covered by the Minimum Support Price at the moment. Six Rabi crops, 14 Kharib crops, and other decisions are covered, with the following names:

  • Wheat, barley, jowar, ragi, bajra, paddy, and maize are seven varieties of grains.
  • Tur, moong, lentil, urad, and gram are five pulse crops.
  • Groundnut, rapeseed, sesame, saffron seeds, soybean, sunflower seeds, and Ramtil are among the eight oilseed crops.

MSP’s Advantages 

  • If the price of a crop falls in the market across the country for some reason, the farmer gets given the price of the commodity based on the government’s MSP rate.
  • MSP ensures that the farmer receives the best possible price for his goods.
  • If a crop’s output is very great in a given state, the government purchases it at MSP so that farmers do not have to worry about moving it from one state to another.
  • MSP aids the government in maintaining control over crop prices.
  • In addition to predicting MSP, the government pays close attention to crop insurance and storage.
  • Every year, the government reviews the MSP price of crops and raises the fixed MSP to help farmers enhance their income.
  • The most significant benefit of implementing MSP is that it protects farmers from middlemen exploitation.
  • Farmers must bear fewer losses.

Read Now:

Leave a Comment