Minimum Support Prices

Why is in news? Cabinet approves Minimum Support Prices for all Rabi Crops for Marketing Season 2023-24

The Cabinet Committee on Economic Affairs chaired byPrime Minister has approved the increase in the Minimum Support Prices (MSP) for all mandated Rabi Crops for Marketing Season 2023-24.

Government has increased the MSP of Rabi Crops for Marketing Season 2023-24, to ensure remunerative prices to the growers for their produce.

The Government’s priority is on increasing production of oilseeds and pulses and thus fulfilling the objective of Atmanirbhar Bharat

The formulated strategies are to increase production through area expansion, productivity through High Yielding Varieties (HYVs), MSP support and procurement.

Government is also promoting adoption of smart farming methods through the use of technology and innovation in the agriculture sector in the country.

Adoption of drone technologies is being done. To promote smart farming, the Government also promotes Startups in the Agriculture sector and nurtures agri-entrepreneurs.

Minimum Support Prices:

The MSP is the rate at which the government purchases crops from farmers, and is based on a calculation of at least one-and-a-half times the cost of production incurred by the farmers.

MSP is a “minimum price” for any crop that the government considers as remunerative for farmers and hence deserving of “support”.

The Commission for Agricultural Costs & Prices (CACP) recommends MSPs for 22 mandated crops and fair and remunerative price (FRP) for sugarcane.

CACP is an attached office of the Ministry of Agriculture and Farmers Welfare.

The mandated crops include 14 crops of the kharif season, 6 rabi crops and 2 other commercial crops.

CACP considers both A2+FL and C2 costs while recommending MSP.

‘A2’: Covers all paid-out costs directly incurred by the farmer in cash and kind on seeds, fertilisers, pesticides, hired labour, leased-in land, fuel, irrigation, etc.

‘A2+FL’: Includes A2 plus an imputed value of unpaid family labour.

‘C2’: It is a more comprehensive cost that factors in rentals and interest forgone on owned land and fixed capital assets, on top of A2+FL.