Write notes on: (a) Minimum support price
Minimum Support Price (MSP) - This is the pre-announced price at which the government purchases foodgrains particularly, wheat and rice from the farmer in order to crate a buffer stock. This price is announced by the government every year before the sowing season to give incentive to the farmers to raise the production of the desired crop. The rising MSPs have raised the maintenance cost of procuring food grains by the government as well as induced farmers to divert land from production of coarse grains to the production of these crops.
