Full form, mandate, and core objectives
- Full Form: Minimum Support Price (MSP) / न्यूनतम समर्थन मूल्य.
- Primary objective: Protects agricultural producers against distress sales during bumper harvest seasons when market supply surges.
- Procurement support: Government agencies (FCI, NAFED, CCI) purchase crops from registered farmers at MSP if mandi prices fall below the announced benchmark.
- Buffer stocking: Procured grains feed the Public Distribution System (PDS) and maintain national strategic food grain reserves.
Mandated crops and calculation methodology
- 22 Mandated crops: Covers 7 cereals (paddy, wheat, maize, bajra, jowar, ragi, barley), 5 pulses (chana, arhar/tur, moong, urad, masur), 7 oilseeds (groundnut, soybean, mustard, sunflower, sesamum, safflower, nigerseed), and raw cotton.
- Fair and Remunerative Price (FRP): Sugar mills are statutorily required to purchase sugarcane under the FRP framework.
- Calculation formula: Fixed at a minimum of 50% profit margin over the comprehensive cost of cultivation (A2 + FL), covering paid-out input expenses and family labor.
Procurement agencies and farmer selling process
- Food Corporation of India (FCI): Manages central pool procurement for paddy and wheat.
- NAFED: Procures pulses and oilseeds under the Price Support Scheme (PSS).
- Cotton Corporation of India (CCI): Undertakes raw seed cotton (kapas) procurement.
- Farmer registration: Farmers register on state procurement portals with verified land records, Aadhaar, and bank accounts to receive direct DBT payments.
Official source
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Commission for Agricultural Costs and Prices (CACP) ↗Related on KisanPe
Common questions
What is the full form of MSP?
MSP stands for Minimum Support Price (न्यूनतम समर्थन मूल्य).
Which agency recommends MSP to the government?
The Commission for Agricultural Costs and Prices (CACP) under the Ministry of Agriculture.
How many crops are covered under MSP?
22 mandated agricultural crops, along with Fair and Remunerative Price (FRP) for sugarcane.
How is MSP calculated?
It is fixed at a minimum of 1.5 times (50% margin over) the cost of production (A2 + FL formula).
General guidance, not personal advice. For your farm, ask your local Krishi Vigyan Kendra or agriculture officer.
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