The MSP full form is Minimum Support Price. It is the threshold or minimum value amount under which the crop of the farmer cannot be purchased in the government mandis. MSP is an integral factor for farmers since it ensures that no matter what, the farmer will surely get a price higher than the cost price of the crop. The Commission for Agriculture Costs and Prices (CACP) agency of the Government of India sets this minimum price for the crop every year prior to the crop being sown. This ensures that the farmer gets the right price for their crop.
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What are the Problems Faced When Preparing for MSP?
Before addressing the problems, let us take a look at the factors contributing to MSP preparation:
- Land Revenue
- Physical Effort
- Interest in Fixed Capital
- Animal Labour or Machine Labour
- Other Prices
However, the government faces many problems while preparing for MSP. The major is that the country is very dynamic with different geographical features leading to different soil quality in different states. The climate as well varies drastically in many states. Development is another issue in preparing MSP, some areas are more developed than others. This leads to variations in cost, diversity of labours, water facilities and many other problems.
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What are the Benefits of MSP?
Given below are the benefits of MSP:
- The most important benefit related to MSP is the guarantee it offers that the farmers will get a fair price for their crop
- Every year, the CACP considers many agriculture-related factors to decide MSP
- It is because of MSP that farmers are apple to sell their crops in government mandis, this allows them to have the entire money of their crop directly into the bank account. This saves them from corruption and middlemen costs
- If the crop is grown in large amounts in the country, this year the MSP guarantees the farmer to get the minimum support price of their crop regardless of the price of the crop in the market.
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