- The prices are decided by CCEA on the basis of recommendations of the Commission for Agricultural Costs and Prices (CACP).
Enrich Your Learning:
Minimum Support Price (MSP)
- MSP is form of agricultural market intervention undertaken by Central Governmentin order to insure agricultural producers are protected against any sharp fall in farm prices.
- It is announced for certain crops by Government prior to the sowing season.
- Its purpose is to incentivize cultivators to adopt modern technology and raise productivity and overall production in line with the emerging demand patterns in the country.
Objectives of MSP:
- The major objectives are to support the farmers from distress sales and to procure food grains for public distribution.
Determination of Minimum Support Price (MSP):
- Cost of production
- Changes in input prices
- Input-output price parity
- Trends in market prices
- Demand and supply
- Inter-crop price parity
- Effect on industrial cost structure
- Effect on cost of living
- Effect on general price level
- International price situation
- Parity between prices paid and prices received by the farmers
- Effect on issue prices and implications for subsidy
Minimum Support Price for 2019-20:
- The Fair and Remunerative Price (FRP)payable by sugar mills for 2019-20 sugar season has been fixed at 275 per quintal for a basic recovery rate of 10%; providing a premium of Rs. 2.75/qtl for each 0.1 % increase in recovery over and above 10%.
- The cost of production of sugarcane for the sugar season is 155per quintal.
- The FRP so approved shall be applicable for purchase of sugarcane from the farmers in the sugar season 2019-20 by the sugar mills.