Minimum Support Price (MSP) - Implied

Minimum Support Price (MSP) is a price set by the Indian government to protect farmers by assuring them a minimum income for their crops. 'Implied MSP' refers to situations where market forces or government interventions *effectively* create a price floor, even without a formal MSP announcement. This can happen through large-scale procurement, export subsidies, or import restrictions.

The key provisions related to MSP include: * MSP is announced by the government for 23 crops before each sowing season. * The CACP recommends MSPs based on factors like cost of production and market trends. * The government procures crops at MSP through agencies like the FCI.

• •MSP is announced for 23 crops.
• •CACP recommends MSP based on cost and market trends.
• •Government procures crops through agencies like FCI.

The Commission for Agricultural Costs and Prices (CACP) plays a crucial role in influencing MSP. It recommends MSPs to the government based on various factors. These factors include the cost of production, demand and supply, market price trends, and inter-crop price parity. While the government makes the final decision, CACP's recommendations are a key input.

While the concept data doesn't explicitly list limitations, we can infer some based on general knowledge. Over-reliance on MSP for certain crops (like rice and wheat) can lead to overproduction and depletion of water resources. It may also distort market prices and create storage challenges. Not all farmers benefit equally from MSP, especially small and marginal farmers who may lack access to procurement centers.

The MSP system emerged in India after the 1960s, during the Green Revolution. Initially, it focused on wheat and rice to incentivize farmers to adopt new technologies and increase food production. Over time, it expanded to cover more crops. The Agricultural Prices Commission (now CACP) was established in 1965 to advise the government on price policy.

MSP plays a significant role in the Indian economy by ensuring price stability for farmers, encouraging agricultural production, and contributing to food security. It provides a safety net for farmers against market fluctuations and helps to stabilize farm incomes. It also incentivizes farmers to adopt modern agricultural practices.

Challenges in implementation include: limited procurement infrastructure, especially in states with weaker agricultural marketing systems; issues with storage and wastage of procured crops; and the fact that not all farmers are able to sell their produce at MSP due to various reasons, including lack of awareness and access to procurement centers.

While the concept data doesn't explicitly list reforms, the 2022 government committee to look into making MSP more effective suggests that improvements are being considered. Common suggestions often include: expanding procurement infrastructure, promoting crop diversification, and exploring alternative mechanisms like price deficiency payments.

The MSP system is primarily governed by government policy decisions and administrative orders. There is no specific Act of Parliament that mandates MSP. However, the Essential Commodities Act, 1955, provides the government with powers to regulate the production, supply, and distribution of essential commodities.

The provided concept data does not offer a comparison of India's MSP with other countries. Therefore, I cannot provide a specific answer to this question.

In the UPSC exam, questions are frequently asked about the objectives, impact, and challenges of MSP. In Prelims, expect factual questions about the crops covered, the role of CACP, and related schemes. In Mains, questions often require you to analyze the effectiveness of MSP and suggest reforms.

The concept data mentions ongoing debates about whether MSP should be legally guaranteed for all crops. A legal guarantee could provide greater security to farmers but may also create significant challenges for government finances and market dynamics. A balanced approach considering both farmer welfare and economic feasibility is necessary.