MINIMUM SUPPORT PRICE Remunerative Price Fixing For Farm Commodities

Journal of Extension System
Year: 2019 (June), Volume: (35), Issue. (1)
First page: (21) Last page: (24)
Online ISSN: 2582-273X
Print ISSN: 0970-2989
doi:

MINIMUM SUPPORT PRICE
Remunerative Price Fixing For Farm Commodities

O. S. Verma

1School of Government , Universiti Utara Malaysia
2 School of International Studies , Universiti Utara Malaysia
3 School of Business Management , Universiti Utara Malaysia

Corresponding Author: Mohamad Ibrahim Hassan Mohamad Al Jasmi
Email: mohamad_ibrahim_h@gsgsg.uum.edu.my

Online Published:
3rd June 2019

Received:
13th January 2019

Accepted:
8th May 2019

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ABSTRACT

Minimum Support Price (MSP) is the assurance of remunerative
price given to farmers for their farm commodities in the beginning of each
sowing season. The government essentially guarantees to buy any of the
harvest at this price. If the market price is more than the MSP, farmers are
free to sell and get higher return. The MSP is thus a safeguard against the
prices falling too low. The government has notified MSP for 23
commodities. These 23 crops are listed in table-5. Close to 90 per cent of
area under cultivation is covered by these crops. The MSP is fixed at 50 per
cent higher than the cost of production. This cost is computed in the
following manner: