What is MSP in Agriculture? What is APMC for Farmers? Click to Know it All!

In demand for an increased MSP in India, farmers all over the nation are showing protest thus leading to unrest in various parts of the country. Many times there have also been many complaints coming from farmers for not being able to sell their crops at MSP.

Now the question is what is MSP in agriculture? What does it mean? How minimum support price matters in Indian agriculture? If you are looking for this answer and want to know all about agriculture ordinance, minimum support price and APMC for the coming UPSC IAS exam, then you have come to the right place. Keep reading on to find all your answers.

What is MSP for Farmers?

MSP in agriculture directs the intervention of the Government of India that insure farm items against any sharp drop of agro prices. On the basis of the recommendation made by the Commission for Agricultural Costs and Prices aka CACP, every year, at the beginning of the farming season, the Government of India announces the minimum support prices for certain crops.

The idea behind MSP ordinance is to protect the farmer, producer in bumper production years against an excessive drop of price. MSP is a guaranteed minimum price for the production of the farmers from the Government.

In case of price drop due to bumper production, the government agencies purchase the entire quantity of agro products at the announced minimum support price.

MSP Crops in India

Under the MSP ordinance, there are 22 MSP crops. 14 of those mandate crops are in the Kharif season, 2 commercial crops and 6 rabi crops. On the basis of the minimum price of rapeseed/ mustard and copra the MSPs if de-husked coconut and toris are fixed. Following is the list of corps under MSP India:

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

Fixation of MSP Agriculture

Following are the factors that are taken under consideration before fixation of MSP in India on for agro products:

Demand and supply.
Production cost.
Domestic and international price trends.
Inter-crop price parity.
Agro and non-agro trading terms.
A minimum margin of fifty per cent over production cost.

Why MSP is Important to Farmers?

For MSP farmers get a fair return. Consumers also get agro products at a reasonable price.
This safeguards the agro-industry against the price fluctuation.
Even in unfavourable situations, MSP ordinance ensures pre-decided minimum price to the farmers.
Without MSP in India, many farmers would stop farming crops thus leading to a higher price hike.

Want to know more about MSP in Agriculture, click here