Q. What do you mean by Minimum Support Price (MSP)? How will MSP rescue the farmers from the low income trap? (150 words, 10 Marks)
Why the Question?
UPSC PYQ – CSE Mains – 2018
Keywords of the Question
- Minimum Support Price (MSP)
- MSP rescue the farmers
- Low income trap
Directive Word
What do you mean – This directive asks you to explain the meaning or concept of a term or phrase. You should provide a clear and precise definition, often including examples or context to illustrate your explanation.
How – This directive requires you to describe the process, mechanism, or manner in which something occurs. You should outline the steps, factors, or methods involved, often providing a logical sequence or framework.
How to approach this Question?
Introduction
- Define Minimum Support Price (MSP).
- Mention its significance in the context of Indian agriculture.
Body
- Explain the mechanism of MSP.
- Discuss how MSP ensures a minimum income for farmers.
- Highlight the role of MSP in stabilizing agricultural prices.
- Mention the impact of MSP on preventing distress sales.
- Discuss how MSP can lead to increased agricultural productivity and investment.
Conclusion
- Summarize the importance of MSP in protecting farmers’ interests.
- Mention any challenges or criticisms of the MSP system.
- Conclude with a forward-looking statement on the potential improvements in the MSP framework.
Note: Please note that the following ‘answers’ are not ‘model answers’ nor are they synopses in the strictest sense. Instead, they are content designed to meet the demands of the question while providing comprehensive coverage of the topic.
Answer Key
Introduction
Minimum Support Price (MSP) is a price set by the government to purchase crops from farmers, ensuring they receive a minimum income regardless of market fluctuations. It acts as a safety net, protecting farmers from distress sales and price volatility.
Body
- Mechanism of MSP:
- MSP is announced by the government before the sowing season for 22 major crops, including wheat, rice, and pulses.
- The Commission for Agricultural Costs and Prices (CACP) recommends MSP based on factors like production costs, market trends, and demand-supply dynamics.
- Ensuring Minimum Income:
- MSP guarantees farmers a minimum price for their produce, providing income security and reducing the risk of losses due to market price drops.
- For example, in 2023-24, the MSP for wheat was set at ₹2,125 per quintal, ensuring farmers receive a fair price.
- Stabilizing Agricultural Prices:
- By setting a floor price, MSP helps stabilize agricultural prices, preventing extreme fluctuations that can harm both farmers and consumers.
- This stability encourages farmers to invest in better inputs and technologies, leading to increased productivity.
- Preventing Distress Sales:
- MSP prevents distress sales by assuring farmers that their crops will be purchased at a guaranteed price, even if market prices fall.
- This reduces the likelihood of farmers selling their produce at low prices due to urgent financial needs.
- Encouraging Agricultural Investment:
- With the assurance of a minimum price, farmers are more likely to invest in quality seeds, fertilizers, and modern farming techniques.
- This can lead to higher yields and better quality produce, contributing to overall agricultural growth.
Conclusion
MSP plays a crucial role in protecting farmers from the low-income trap by ensuring a minimum income, stabilizing prices, and encouraging investment in agriculture. However, challenges such as limited procurement and regional disparities need to be addressed to make MSP more effective. Strengthening the MSP framework can further enhance its impact on farmers’ welfare and agricultural sustainability.
Mind Map
