What do you mean by Minimum Support Price (MSP)? How will MSP rescue the farmers from the low-income traps? (150 words)

Minimum Support Price is the administratively announced floor price at which the government seeks to protect selected crops from excessive price decline, based on production costs and wider economic considerations.

The Commission for Agricultural Costs and Prices recommends MSP after considering paid-out costs, family labour, demand-supply conditions, domestic and international prices, inter-crop parity and consumer welfare. Procurement by public agencies gives the announcement credibility.

• It limits distress sales after harvest and provides a predictable return when market arrivals depress prices.
• Procurement, storage and public distribution create demand, reduce price risk and support investment in seed, irrigation and machinery.
• Expanded pulses and oilseed procurement can diversify cultivation and reduce import dependence.

Benefits remain concentrated in a few crops and regions because procurement, markets and storage are uneven. Strengthen decentralised procurement, transparent digital markets, warehouses, price-deficiency payments and farmer-producer organisations, while avoiding environmentally harmful crop monocultures.

Keywords: agricultural price policy, farm incomes, minimum support price procurement.