Question
Consider the following statements regarding Minimum
Support Price (MSP): 1. The MSPs are announced during harvesting season for certain crops based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). 2. The MSPs are fixed at incentive levels to induce more investment by farmers in the farm sector. Which of the statements given above is/are correct?Solution
Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices —a guaranteed price to save farmers from distress sales. The MSPs are announced at the beginning of the sowing season for certain crops based on the recommendations of the Commission for Agricultural Costs and Prices (CACP, 1985).
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