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What is the word MSP that creates mistrust between the farmers and the government? Why is it and since when?

What is the word MSP that creates mistrust between the farmers and the government? Why is it and since when?


  • The MSP system was also in place during the Mughal and Rajput regimes, traditionally accepted after independence, but with no legal guarantee.
  • According to the report of Shantakumar Punch, only 6% of the farmers in the country sell their produce as per MSP, so the Shantakumar Punch has recommended to abolish this system.

The nationwide agitation of the peasants against the three laws known as the Agricultural Reforms does not take the name of resolution. All attempts at persuasion by the government have failed. The biggest doubt in the minds of farmers who announced the closure of India on Tuesday is related to the minimum support price for MSP. They fear the new law will shut down the MSP. Despite Minister of State for Agriculture Narendrasinh Tomar's assurance that the MSP will not be discontinued, the farmers are adamant on the demand for repeal of the new law by giving legal sanction to the provision of MSP. What is MSP, who decides it, on what basis, do farmers know anything about the MSP of any agricultural product?

What is MSP? Why have

  • As more than half of India's population is engaged in agriculture-based employment, the Indian economy is largely dependent on agriculture, making it a priority for the government to provide farmers with affordable prices for their produce.
  • Twice a year (during rabi and kharif seasons) the government-appointed Punch announces a minimum support price to prevent losses to farmers and if no one buys produce at this price in the open market, the government buys it itself to prevent farmers from incurring losses.
  • The purpose of this is to unite the market and stop the exploitation of the farmers by giving low prices or to prevent the farmer from getting hurt when a bumper product of a farm product is produced and the price goes down.
From the time of Sher Shah Suri, care was taken not to harm the farmers, which was also prevalent in the Rajput rule.

MSP was also in Mughal and Rajput rule

  • Traders in India have traditionally felt that farmers get affordable prices and farming is not ruined.
  • During the reign of Sher Shah Suri, it was customary for the state to purchase a portion of the farmers' produce. The Mughal emperors also continued this practice.
  • The princely states of Jodhpur, Jaipur and Bikaner used to buy and store grains and pulses at the time of harvest so that the farmers could get affordable prices and distribute the same grains in times of drought. It was also a kind of MSP today.
  • Since independence, every government has made the MSP system more sophisticated with necessary reforms. The current NDA government is also saying that this system will continue.
Who determines the MSP?



  • The Commission for Agricultural Costs and Prices (CACP) has been constituted by the Central Government to fix the prices of agricultural produce.
  • The CACP consists of a chairman, a secretary, a government-appointed agronomist and two farmers directly involved in agriculture. Interestingly, both the vacancies for the farmers' section in the CACP have been vacant for some time now. This means that the minimum support price is being decided by the officials in the absence of farmers.
How is MSP determined?
  • The MSP is fixed on a total of 23 types of farm products as per the norms set by the Commission, including 7 cereals, 5 pulses, 7 oilseeds and 4 cash crops.
  • The MSP is announced twice a year by the Punch taking into account all the factors such as planting, yield, demand and supply of each of these crops across the country.
  • Arrangements for Kisan Mandali and Market Yard are in place by the state governments to ensure that farmers get prices as per the MSP released by the Punch.

Farmers fear that the report by the Shantakumar Commission has recommended the abolition of MSP.

So where is the problem, brother?

  • There is no legal or constitutional basis for the MSP to decide on the system. Which means it's about to be the most delusional time of the year, as well.
  • Another requirement is that the government may close down the system.
  • Farmers are afraid that the present government will stop the system, the reason is the Shantakumar Punch. In 2014, the central government set up a commission headed by Shantakumar before implementing agricultural reforms.
  • One of the various findings of the commission was that out of 90 million farming families, only 6% sold their produce on MSP, meaning 94% sold it in the open market or through intermediaries.
  • Based on the findings of the Shantakumar Punch, the government passed 3 agriculture bills. The Shantakumar Commission had also suggested abolishing the MSP, which the government has not implemented, but given the provisions of three controversial laws, farmers fear that the government may also repeal the MSP in the near future.

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