The concept of "Minimum Support Price"(MSP) is primarily associated with:

The correct answer is Agricultural products.

Key Points

• Minimum Support Price (MSP) is a policy instrument implemented by the Government of India to safeguard farmers against price fluctuations for their produce.
• MSP is announced annually by the Commission for Agricultural Costs and Prices (CACP) under the Ministry of Agriculture and Farmers Welfare.
• The MSP is set for 23 major crops, including rice, wheat, pulses, and oilseeds, to ensure farmers receive a minimum price for their agricultural produce.
• The primary objective of MSP is to protect farmers from distress sales and ensure a remunerative price for their crops.
• MSP serves as a tool to encourage crop diversification and ensure food security in India by promoting the cultivation of essential crops.

Additional Information

• Commission for Agricultural Costs and Prices (CACP)
  • CACP is a statutory body that recommends MSPs for various agricultural crops based on production costs, market trends, and demand.
  • The recommendations are submitted to the Cabinet Committee on Economic Affairs (CCEA) for final approval.
• Factors Determining MSP
  • Cost of production (A2+FL formula, which includes paid-out expenses and family labor).
  • Demand-supply dynamics and international prices of agricultural products.
  • Impact on consumers and inflation.
  • Environmental sustainability and crop diversification.
• Procurement Agencies
  • Key agencies like Food Corporation of India (FCI) and National Agricultural Cooperative Marketing Federation of India (NAFED) procure crops at MSP.
  • These agencies help stabilize market prices and prevent exploitation of farmers by intermediaries.
• Challenges in MSP Implementation
  • Limited coverage of crops under MSP, leaving many farmers outside the safety net.
  • Issues in the timely procurement of crops and inadequate storage facilities.
  • Dependence on middlemen leading to reduced benefits for farmers.