Consider the following statements: 1. In the case of all cereals, pulses and oil-seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India. 2. In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise. Which of the statements given above is/are correct?

QUESTION

Easy

Economy

Prelims 2020

Consider the following statements:

In the case of all cereals, pulses and oil-seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India.
In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise.

Which of the statements given above is/are correct?

Select an option to attempt

Explanation

Statement 1 is incorrect. The procurement of cereals, pulses, and oilseeds at Minimum Support Price (MSP) is not unlimited. The government procures these crops based on pre-decided targets, storage capacity, and buffer stock norms. Additionally, procurement is not uniform across all states/UTs, as it depends on state policies and the presence of procurement agencies.

Statement 2 is incorrect. The MSP is not fixed in such a way that the market price will never rise above it. In many cases, market prices may rise above MSP due to factors like supply-demand dynamics, export demand, and production levels. MSP acts as a floor price to protect farmers but does not cap the market price.