Context
- Recently, the government has procured 34,917 tonnes of wheat for the Rabi marketing season at MSP for Rs.70.36 cr.
What is MSPs
- MSPs are the prices guaranteed by the government at which the government procures certain crops to insure the agricultural producers against any sharp fall in farm prices in case of a bumper production of the crop.
- It is an integral part of the government`s Agriculture Price Policy which strives to ensure support prices for farmers and affordable prices for the consumer.
- The government announced the MSPs for different crops before the sowing season on the basis of the recommendations of the Commission for Agricultural Cost and Prices(CACP) .
- MSPs are decided by considering the factors such as cost of production , domestic and international prices,demand-supply conditions,inter-crop price parity, and the term of trade between agricultural and non-agricultural sectors, etc. in the account.
- Farmers remain always free to sell their crop anywhere they get a fair price other than MSP.
- MSPs are introduced with an objective to protect the farmer from distress sales and to procure food grains for public distribution. This procured food grain utilized by the government under the targeted public distribution system(PDS) and other welfare schemes under the National Food Security act.
Fair remunerative price(FRP)
It is the price that is set by the government for the procurement of sugarcane that the sugar mills have to pay to the sugarcane growers.
