• UGI USER
  • Jan 03, 2024
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MSP CONCERNS IMPACTING CROP DIVERSIFICATION

Why in the News?

  • A high Minimum Support Price (MSP) for certain crops is impeding crop diversification, benefiting specific states.
  • Various Union ministries expressed concerns about the MSP proposal for rabi crops in the 2024-25 marketing season.
Source: Pmf

About Decision Taken:

  • Cabinet approved the proposal to increase MSP for rabi crops like wheat, barley, gram, lentil, rapeseed, mustard, and safflower.
  • Maximum increases were 7.08% for lentils and 7.06% for wheat.

About Minimum Support Price:

  • MSP Definition: The minimum Price established by the government to guarantee farmers a price as a Minimum Support for their agricultural produce.
  • CACP Recommendations: The Commission for Agricultural Costs and Prices (CACP) suggests MSP based on factors like production cost, demand, supply, and market trends.
  • CACP Establishment: Formed in January 1965, CACP operates as an attached office of the Ministry of Agriculture and Farmers Welfare.
  • CCEA Approval: The Cabinet Committee on Economic Affairs (CCEA), led by the Prime Minister, makes the final decision on approving MSP levels.
  • Objective of MSP: MSP aims to ensure profitable prices for farmers, to protect them from fluctuations in market price and promote crop diversification.
  • Crops Covered: CACP recommends MSP for 22 specified crops, including 14 kharif crops, 6 rabi crops, and 2 commercial crops, and fair and remunerative prices (FRP) for sugarcane.