Consider the following statements:

1. In the case of all cereals, pulses and oil-seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India.

2. In the case of cereals and pulses, the MSP is fixed in any State/UT at level to which the market price will never rise.

Which of the statements given above is/are correct?

The correct answer is option 4.

Key PointsMinimum Support Price (MSP) :

• While procurement is open-ended, it is not unlimited since our buffer stock is limited. Hence statement 1 is incorrect.
• Market price has no link with Minimum Support Prices and it can go below or above of MSP depends upon the demand of crop in the market, hence statement 2 is incorrect.
• The chief objectives of setting up MSP are:
  • Support farmers from distress sales
  • To procure food grains for public distribution
• Issue Price is the price at which the procured and buffer stock food grains are provided through the PDS.

Additional Information

•  The MSP is recommended by the Commission for Agricultural Costs and Prices and announced by Cabinet Committee on Economic Affairs.
•  MSP for sugarcane is known as Fair and Remunerative Prices.

Presently, there are 23 crops covered by MSP, namely:

• Cereals (7) - paddy, wheat, barley, jowar, bajra, maize, and ragi
• Pulses (5) - gram, arhar/tur, moong, urad, and lentil
• Oilseeds (8) - groundnut, rapeseed/mustard, toria, soybean, sunflower seed, sesamum, safflower seed, and nigerseed
• Raw cotton
• Raw jute
• Copra/ De-husked coconut
• Sugarcane (Fair and remunerative price)
• Virginia flu cured (VFC) tobacco