Minimum Support Price Scheme
Minimum Support Price Scheme Also Called As Market Intervention Scheme
The Minimum Support Prices were announced by the Government of India for the first time in 1966-67 for Wheat in the wake of the Green Revolution and extended harvest, to save the farmers from depleting profits. (Minimum Support Price Scheme)
Minimum Support Price is the price at which government purchases crops from the farmers irrespective of the market price.
Sometimes, the government procures at a higher price than the MSP. Here, the price will be referred as procurement price
The objective of the MSP scheme is to check fall in prices of farm produce below certain level and thus support the farmers. (Minimum Support Price Scheme)
The MSP is announced by the Government of India for around 23-25 crops currently at the beginning of each season viz. Rabi and Kharif.
In December 2011, Government of India has started Market Intervention Scheme (MIS) on the request of the states for procurement of agriculture and horticulture commodities that are perishable and not covered under Minimum Support Price.
Both the schemes run under Ministry of Agriculture and Farmers Welfare.
The MSP is calculated and recommended by the CACP.
Minimum Support Price Scheme
For the calculation of the MSP, the CACP takes into account a comprehensive view of the entire structure of the economy of a particular commodity or group of commodities.
Other factors include cost of production, changes in input prices, input-output price parity, trends in market prices, demand and supply, inter-crop price parity, effect on industrial cost structure, effect on cost of living, effect on general price level, international price situation, parity between prices paid and prices received by the farmers and effect on issue prices and implications for subsidy. (Minimum Support Price Scheme)
Commission makes use of both micro-level data and aggregates at the level of district, state and the country.
The government finally decides the support prices for various agricultural commodities after taking into account the following factors: Recommendations of Commission for Agricultural Costs and Prices Views of State Governments Views of Ministries Other relevant factors. (Minimum Support Price Scheme)
Minimum Support Price Scheme (MSPS) for Oil seeds and Pulses:
Department of Agriculture and Cooperation implements the Price Support Scheme for Oil Seeds and Pulses through the National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED).
NAFED is the nodal procurement agency for Oilseeds and pulses, apart from the Cotton Corporation of India. So, when the prices of oilseeds, pulses and cotton fall below MSP, NAFED purchases them from the farmers.
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