Q. Consider the following statements about Minimum Support Price (MSP) of agricultural crops:
1.It is a legal guarantee to be paid to farmers by the government.
2.It is decided based on the binding recommendations made by the Commission for Agricultural Costs and Prices (CACP).
3.Currently, the MSP is fixed at 50% over the A2+FL cost.
How many of the above statements are correct?
Answer: A
Notes:
Explanation: Only Statement 3 is correct
Statement 1 is incorrect: MSP in India is not legally backed- The government is not legally bound to pay the MSP even when the open market rates fall below the floor rates set by the MSP. Farmers cannot demand it as a right.
Statement 2 is incorrect: MSP is based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). The CACP submits its recommendations to the government in the form of Price Policy Reports every year. Its recommendations are not binding on government.
Statement 3 is correct: CACP reckons only to A2+FL cost for return. Currently, the MSP is fixed at 50% over the A2+FL cost.
