Minimum support price MSP


 
 
Concept Explanation
 

Minimum support price MSP

Minimum support price (MSP)

Grains may get spoiled if they are not stored properly. Most farmers do not have the facilities to store grains. So they have to sell their crops soon after harvest. Also it is very expensive to transport huge quantities of grain to the mandi. The agents and arhatiyas take advantage of this fact and pay the farmers a very low price. To promote farm activities, the government announces a minimum support price (MSP) for all types of grains. The government buys the grains from farmers at this price even if the market price is lower and assures a fair earning to the farmers. The grains bought by the government are sold to the public at reasonable rates through government-owned fair price shops.

 
 
 


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