Definition of MSP:
- MSP stands for Minimum Support Price.
- It is a form of agricultural market intervention by the government of India to ensure that farmers get a fair price for their produce.
Explanation:
- The Minimum Support Price (MSP) is the price at which the government buys crops from farmers.
- It is set by the government to protect farmers from any sharp fall in crop prices.
- MSP acts as a safety net for farmers and provides them with an assured income for their produce.
- The MSP is determined by taking into consideration various factors such as the cost of production, market demand, and supply situation.
- The government announces MSP for various crops before the sowing season to provide farmers with a price benchmark.
- It helps in stabilizing the agricultural economy and ensuring food security in the country.
- The procurement of crops at MSP is done through government agencies such as the Food Corporation of India (FCI) and state agencies.
- MSP is primarily applicable to major food crops such as wheat, rice, pulses, and oilseeds.
Conclusion:
- MSP refers to Minimum Support Price and is an important policy tool used by the government to support farmers and ensure their economic well-being.

Minimum Support Price (MSP)

The term MSP stands for Minimum Support Price, which is the price at which the government purchases crops from the farmers. It is a form of agricultural price support policy that aims to ensure that farmers receive a fair remuneration for their produce and are protected from price fluctuations in the market.

Key Points about MSP:
- The MSP is announced by the government for various crops before the sowing season to provide price security to farmers.
- It acts as a safeguard to ensure that farmers do not incur losses in case of a fall in market prices.
- The MSP is determined based on factors such as input costs, market price trends, demand-supply dynamics, and the cost of production.
- The government procurement agencies like Food Corporation of India (FCI) and NAFED purchase crops from farmers at MSP to build buffer stocks and stabilize prices in the market.
- MSP is an essential tool to support farmers' income and ensure food security in the country.

Importance of MSP:
- MSP helps in incentivizing farmers to produce more food grains and other crops by providing them with a guaranteed price.
- It protects farmers from market price volatility and assures them of a minimum income for their hard work.
- MSP also plays a crucial role in maintaining food security by ensuring an adequate supply of essential commodities in the market.

In conclusion, MSP is a vital policy tool that supports farmers and ensures stability in the agricultural sector. It is an important mechanism for promoting agricultural growth and safeguarding the interests of farmers in the country.