MSP

Minimum Support Price is a form of market intervention by the government to insure agricultural producers against any sharp fall in farm prices by guaranteeing a floor price for select crops.

Why it matters

Acts as a price signal to farmers to influence cropping patterns and production decisions.
Provides a safety net to protect farmers from distress sales during bumper harvests.
Ensures the procurement of food grains for the public distribution system and buffer stock maintenance.

How it is asked

Focus on the mechanism of price determination, the role of the Commission for Agricultural Costs and Prices, and the impact of MSP on food security, fiscal deficit, and crop diversification.

In the syllabus

Farm subsidies, minimum support prices, Public Distribution System GS3
Major crops GS3

In the news

AAP criticism of PM's Punjab visit 19 July

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