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In agriculture, what is the full form of MSP?
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Answer: Option B — Minimum Support Price
Detailed Solution
MSP stands for "Minimum Support Price", the price at which the government buys certain crops from farmers, to protect them from a sharp fall in market prices.
About MSP:
- It is a form of market intervention by the Government of India to guarantee farmers a minimum price for their produce.
- If market prices fall below the MSP, government agencies (such as the Food Corporation of India, FCI, and state agencies) buy the crop at the MSP.
- It was first introduced for wheat in 1966-67, at the start of the Green Revolution, to encourage farmers to adopt new technologies.
How MSP is fixed:
- It is announced by the Government of India before each sowing season, on the recommendation of the "Commission for Agricultural Costs and Prices" (CACP), set up in 1965 (as the Agricultural Prices Commission).
- The final decision is taken by the "Cabinet Committee on Economic Affairs" (CCEA), chaired by the Prime Minister.
- The CACP considers the cost of production, demand and supply, market price trends, inter-crop price parity and other factors.
- Since 2018-19, the government has fixed MSPs at least 1.5 times the cost of production (the "A2+FL" cost, which includes paid-out costs plus the imputed value of family labour).
The National Commission on Farmers (2004-06), chaired by M. S. Swaminathan, had recommended MSP at least 50 per cent above the comprehensive cost ("C2" cost).
Crops covered:
MSP is announced for 22 mandated crops: 14 kharif crops (such as paddy, jowar, bajra, maize, ragi, tur, moong, urad, groundnut, soybean and cotton), 6 rabi crops (wheat, barley, gram, masur, rapeseed-mustard and safflower) and 2 commercial crops (jute and copra).
For sugarcane, the government fixes a "Fair and Remunerative Price" (FRP) instead.
Procurement is mainly of rice and wheat, and mostly in states such as Punjab, Haryana, Madhya Pradesh and Chhattisgarh.
Debate:
Farmers' groups have demanded a legal guarantee for MSP, especially during the farmers' protests of 2020-21 against three farm laws, which were repealed in November 2021.
Related abbreviations:
- CACP: Commission for Agricultural Costs and Prices.
- FCI: Food Corporation of India (1965).
- FRP: Fair and Remunerative Price.
- PM-AASHA (2018): for procurement of pulses and oilseeds.
Why not the other options?
- ✗"Maximum Selling Price" is not related to farm support prices; MRP means Maximum Retail Price.
- ✗"Market Stabilisation Price" is not the correct expansion.
- ✗"Minimum Sale Payment" is not the correct expansion.
Quick tip
Remember: MSP = Minimum Support Price (first for wheat 1966-67; recommended by CACP 1965; approved by CCEA; at least 1.5 times A2+FL cost since 2018-19; 22 crops; sugarcane = FRP); FCI = 1965.
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Agriculture in India — Preparation
This question tests your understanding of Agriculture in India, a key topic in the General Knowledge section. The detailed solution above uses a step-by-step approach to show the reasoning, and where available, a shortcut that helps you solve similar questions in under 90 seconds during the actual exam.
This topic covers agriculture in India: cropping seasons (kharif, rabi and zaid), major food and cash crops and their leading producer states, irrigation, the Green, White, Blue and other agricultural revolutions, and allied activities such as animal husbandry and fisheries. Questions usually ask which crop belongs to which season, which state is the largest producer of a crop, and which revolution relates to which product. For example, the White Revolution relates to milk and was led by Verghese Kurien, and the Blue Revolution relates to fisheries. Producer rankings can change from year to year, so check the latest data for those questions. Practise the agriculture in India questions below, written in the style of the general awareness sections of exams such as SSC, banking, railways, CUET GAT, MAH CET and CLAT. Each question comes with a detailed explanation that adds related facts, so every question helps you revise more than one point.