MSP Raised for Rabi Crops
Part of: GS Prelims and GS-III – Agricultural Pricing
- Recently, the Cabinet Committee on Economic Affairs has marginally increased the Minimum Support Price (MSP) of six rabi crops for 2021-22.
- MSP rates were hiked for wheat, barley, gram, masoor dal (lentil), safflower, and rapeseed and mustard.
- The increase in MSP is in line with the principle of fixing the MSPs at a level of at least 1.5 times of the All-India weighted average Cost of Production as announced in Union Budget 2018-19.
Important value additions
Minimum Support Price
- The MSP is the rate at which the government buys grains from farmers.
- It is to counter price volatility of agricultural commodities due to the factors like variation in their supply, lack of market integration and information asymmetry.
- The MSP is fixed for 23 crops based on the recommendations of the Commission for Agricultural Costs and Prices (CACP), Ministry of Agriculture.
- The Food Corporation of India (FCI), the nodal central agency of the Government of India, along with other State Agencies undertakes procurement of crops.
Do you know?
- Rabi crops are agricultural crops that are sown in winter and harvested in the spring in India. Eg. Wheat, barley, mustard etc.