Short note on M.S.P
A pre-announced price paid to the farmers for their crops is called Minimum Support Price. It is declared by the government every year before the sowing season to provide incentives to the farmers for raising the production of these crops .
The rising of Minimum Support price will have the following implications:
a. It will increase the maintenance cost on part of the government.
b. It can create shortage of non grain food items.
c. Farmers may not diversify their production and may focus on producing cereals on which MSP is provided.
d. It will lead to shortage of vegetables may lead to inflation.