Question

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?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

Answer 1

Correct Answer - Option 4 : Neither 1 nor 2

The correct answer is Neither 1 nor 2.

• 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.

•  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.

• The Centre currently fixes MSPs for 23 crops and these are as follows -
  • 7 cereals – paddy, wheat, maize, bajra, jowar, ragi and barley
  • 5 pulses – chana, arhar/tur, urad, moong and masur.
  • 7 oilseeds – rapeseed-mustard, groundnut, soya bean, sunflower, sesamum, safflower and nigerseed.
  • 4 commercial crops – cotton, sugarcane, copra and raw jute.