Concept of MSP and

SMP

SURENDHAR
2018033073
MSP

 Minimum support price

 MSP is a price at which govt offers to procure produce
crops from farmer
 Market price fall below MSP

Govt step in to buy the crops

CONT..

 MSP decided by govt at onset of sowing season.

 MSP calculated based on
1) Cost of production
2) Market price
3) Demand and supply
 MSP covers paddy, wheat, maize, sorghum, pearl millet, barley,
pulses, oil seeds etc.,(24 crops)
Calculation of MSP

Merits of MSP

 MSP ensures farmers get minimum price for their

produce.
 It helps in farmer at unfavourable condition
 MSP is safeguards farmers from price fall.
 MSP helps to provide food grain supply to buffer stock
 It helps in food security
Issues in MSP

• MSP= 1.5 × (costA2

What government is
currently giving +family labour)

What farmers want • MSP = 1.5 × (Cost C2)

SMP – statutory minimum price

 MSP is announced by central government based

on cost of cultivation estimated by CACP
 Thisis the basic price sugarcane mills must pay
sugarcane growers
Thank you