To See Current MSP Rate For Various Agricultural Product Visit- https://cacp.dacnet.nic.in/ViewContents.aspx?Input=1&PageId=36&KeyId=0
Minimum Support Price is the price at which government purchases crops from the farmers, whatever may be the price for the crops. Minimum Support Price is an important part of India’s agricultural price policy.
The MSP helps to incentivize the framers and thus ensures adequate food grains production in the country. I gives sufficient remuneration to the farmers, provides food grains supply to buffer stocks and supports the food security programme through PDS and other programmes.
Sometimes, the government procures at a higher price than the MSP. Here, the price will be referred as procurement price. The procurement price will be announced soon after the harvest. Normally, the procurement price will be higher than the MSP, but lower than the market price. The price at which the procured and buffer stocke food grains are provided through the PDS is called as issue price.
As of now, CACP recommends MSPs of 23 commodities, which comprise 7 cereals (paddy, wheat, maize, sorghum, pearl millet, barley and ragi), 5 pulses (gram, tur, moong, urad, lentil), 7 oilseeds (groundnut, rapeseed-mustard, soyabean, seasmum, sunflower, safflower, nigerseed), and 4 commercial crops (copra, sugarcane, cotton and raw jute)
The Commission for Agricultural Costs & Prices (CACP) is an attached office of the Ministry of Agriculture and Farmers Welfare, Government of India. It came into existence in January 1965. Currently, the Commission comprises a Chairman, Member Secretary, one Member (Official) and two Members (Non-Official). The non-official members are representatives of the farming community and usually have an active association with the farming community.
Objective of MSP
To protect farmer from loss.
Support public distribution system.
Remove uncertainty in agriculture.
How MSP is calculated for each crop?
The MSP is calculated and recommended by the CACP. 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.
Commission makes use of both micro-level data and aggregates at the level of district, state and the country.
There are various supply related information that are needed to estimate the MSP. These are – area, yield and production, imports, exports and domestic availability and stocks with the Government/public agencies or industry, cost of processing of agricultural products, cost of marketing – storage, transportation, processing, marketing services, taxes/fees and margins retained by market functionaries; etc. are also considered.
Different Ministries and Departments help the Commission to arrive at the MSP. The estimates of Cost of Cultivation/Cost of Production, an important input for forming the recommendation of MSP, are made available to the Commission through the Comprehensive Scheme for Studying the Cost of Cultivation of Principal Crops, operated by the Directorate of Economics and Statistics, Department of Agriculture and Cooperation, Ministry of Agriculture, Government of India.
These estimates take into account real factors of production and include all actual expenses in cash and kind incurred by the farmer in production, rent paid for leased in land, imputed value of family labour, interest value of owned capital assets (excluding land), rental value of owned land( net of land revenue), depreciation of farm implements and buildings and other miscellaneous expenses.