MSP Full Form
What is the full form of MSP
The government sets a minimum support price (MSP) at which certain agricultural goods must be sold in order for farmers to be paid directly, even if the open market price is less than the cost of production. The MSP for Rabi crops, such as wheat, mustard, safflower, and masoor (lentil) dal, as well as rapeseed and chana or gramme, was increased by the Central Government on September 9, 2021.MSP is a type of government intervention that protects farmers from a sharp drop in the price of their products and aids them in avoiding losses. The MSP for 24 commodities is set by the Indian government twice a year. The government does this to shield the farmers from a decline in prices in a year of abundant crops. The government will buy the entire supply from the farmers at MSP if the market price falls below the declared MSP.
Determination
Farmers incur some implicit expenses as well as explicit costs when they raise crops. The labour provided by family members and the rent that farmers pay are examples of implicit or unpaid costs. All of these expenses are taken into account when determining and setting the Minimum Support Price, or MSP. You can take into account the variables A2, FL, and C2 if you're speaking in more mathematical and technical terms. The following factors are taken into account by the Commission when determining agricultural costs and prices, or CACP:
MSP Types
A2 - This comprises all costs incurred by farmers for the purchase of fertiliser, seeds, chemicals, and labour hired for the growth, development, and upkeep of food crops.
A2 + FL - This includes both the explicit costs incurred and the implicit costs associated with family labour.
C2 - Included in this are A2 + FL, fixed assets, rent paid by farmers, and fixed capital assets.
MSP Formula
The costs of A2+FL are equal to 1.5 times the MSP formula. The CACP takes into account both C2 and A2+FL costs when calculating the MSP. In order to ensure that the MSP covers the production costs, the CACP uses the A2+FL formula and the C2 formula as benchmark reference costs for return.
MSP Formula, Benefits, Conclusion
MFP AND MSP
The Ministry of Tribal Affairs is responsible for introducing this most recent programme. It aims to fix MSP throughout all states for a specific Minor Forest Produce. The nodal implementing organisation for the same is TRIFED.
MSP Benefits
Through the Food Corporation of India (FCI) and state agencies, the government offers price support for wheat and paddy. According to this strategy, all food grains submitted by farmers within the allotted time frame and meeting the government's standards are bought at MSP by state government organizations, including FCI for the Central Pool.
Additionally, under the Price Support Scheme of the Umbrella Scheme of Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA), as per its stipulated parameters, oil seeds, pulses, and copra of fair average quality (FAQ) are purchased from registered farmers.
The predetermined concept to retain MSP at levels of 1.5 times the cost of production was declared in the Union Budget for 2018–19. As a result, the government raised the MSPs for all required Kharif (including wheat) and Rabi crops.
Conclusion
The MSP was created to provide farmers in Punjab and Haryana with financial assurance by encouraging them to plant wheat and rice. Because of how well it operated in the 1970s and 1980s, our nation currently has a surplus of food grains.
Other Related Full Form:-
Frequently Asked Questions (FAQs)
About twenty commodities have their prices regulated twice a year by the Indian government. MSP is determined by the recommendations of the Commission for Agricultural Costs and Prices (CACP), the Ministry of Agriculture's top pricing policy advisory body.
To guarantee that growers receive fair pricing for their goods, the government has enhanced the MSP of Rabi Crops for the Marketing Season 2023–2024. Lentil (Masur) has received the highest approved MSP rise, at Rs. 500 per quintal, followed by rapeseed and mustard, all at Rs. 400 per Quinta.
According to a committee report from the Union government, only 6% of the nation's farmers benefit from MSP.
The government sets MSPs for 23 different crops, but only rice and wheat are actually affected because the government only purchases these two commodities in adequate numbers. MSPs provide a guarantee that the government will step in if market rates drop below that point, assisting in preventing distressed sales.
The Center established the Minimum Support Price (MSP) for the first time in 1966–1967. After all, India had a significant food production shortfall at the time of independence. The population's strong demand was greater than the little production could handle.