- Definition: MSP is the rate announced by the Government of India.
- At this rate, government agencies procure agricultural produce from farmers.
- It is announced before sowing, during each Rabi and Kharif crop season.
- Determination:
- Based on the recommendation of the Commission for Agricultural Costs and Prices (CACP).
- Approved by the Cabinet Committee on Economic Affairs (CCEA).
- CACP considers factors like cost of production (A2, A2+FL, C2), demand-supply, price trends, inter-crop price parity, terms of trade, and implication on consumers.
- Finance Minister announced MSP of at least 50% over cost of production (A2 + FL).
- MSP is same across India for a particular crop.