MSP full form or meaning is Minimum Support Price.
The minimum support price is the price below which the crop of the farmer cannot be purchased in the government mandi.
MSP is very important for farmers because it ensures that in any case, the farmer will definitely get a price higher than the cost price of his crop.
The Government of India’s agency Commission for Agricultural Costs and Prices, ie CACP, sets a minimum support price for that crop every year before it is sown so that farmers get the right price for their crop.
Government of India fixes MSP of crops on the recommendation of CACP.
At present, MSP is applicable to 26 crops, including cereals, pulses, oilseeds, etc.
To understand the MSP with an example, assuming the government has fixed the MSP of ₹ 2000 per quintal for the 2021 wheat crop, then the MSP law says that any government mandi can not purchase wheat procurement from the farmer below ₹ 2000 per quintal price.
Today, the economic condition of the farmers who get the benefit of MSP has improved a lot, but sadly, even today, there are very few farmers in our country who get the full benefit of MSP.
Along with determining the MSP, the government also ensures that the crop of the farmers can be purchased on the MSP, for this the FCI, a Government of India organization, has maintained a lot of godowns at the district and block levels.
Then the government either sells this grain according to its needs in the market or provides it to the people at cheap prices under the food security scheme being run for the poor people.
How MSP is prepared?
Many things related to crops and farmers are taken care of while preparing MSP.
Some of the key points are-
- physical effort
- Animal labour or machine labour
- Land revenue
- Interest on fixed capital
- Other prices
Benefits of MSP
- The biggest advantage of MSP is that it guarantees the farmers that they will get a fair price for their crop.
- Another advantage of MSP is that it is decided every year and many things related to agriculture are taken into consideration while deciding.
- Due to MSP, when the farmer is able to sell his crop in a government mandi, then the entire money of the crop reaches his bank account directly, thereby protecting the farmer from middlemen and other corruption.
- If a crop grows in a large amount in the country in a given year, the MSP, in that case, guarantees to the farmer that whatever the price of that crop in the market, he must get the minimum support price ie MSP.
What are the problems faced in preparing MSP?
When government agencies prepare MSP, they face many problems.
The biggest problem is that our country is very big and the soil quality of different states is different, along with the climate of each state is also varied.
Some other problems such as variations in cost, diversity in water facilities, diversity of labour and some other problems are also faced while preparing MSP.
Some interesting facts of MSP
- In the year 1966- 67, the MSP i.e. minimum support price was fixed for the first time on wheat and after that gradually other crops were also included in it.
- Despite MSP being a very well known law, only 6% of the farmers in India get the opportunity to sell crops on MSP, 90% of them are from Punjab and Haryana.
Some other famous full forms of MSP-
MSP- Member Service provider- in internet
MSP – Music service provider- in Music
similar full forms-
CBI full form