Government fixes Minimum Support Prices (MSPs) for the crops covered
under MSP to ensure a minimum return to farmers. However, farmers are
free to sell in the open market if it offers a higher price than MSP.
The Government fixes the Minimum Support Prices (MSPs) of various crops
on the recommendations of the Commission for Agricultural Costs and
Prices (CACP), the views of concerned State Governments and Central
Ministries/Departments to ensure a minimum return to the growers. While
formulating its recommendations on price policy, CACP considers a number
of important factors which include, interalia, cost of production,
changes in input prices, trends in market prices, demand and supply
situation, effect on general price level, effect on cost of living etc.
The Government ensures MSP through procurement operations undertaken by
the Central, State and cooperative agencies in the States.
In addition, Government is implementing Market Intervention Scheme (MIS)
for agricultural and horticultural commodities not covered under the
Price Support Scheme. The MIS is implemented on the request of State/UT
Government in order to protect the growers of these commodities from
making distress sale in the event of bumper crop when the prices tend to
fall below the cost of production.
This information was given by Shri Tariq Anwar, Minister of State for
Agriculture and Food Processing Industries in written reply to a
question in the Rajya Sabha today.
MP: CP: small farmers (23.11.2012)
(Release ID :89309)