What is MSP? Full-Form of MSP? What is the Minimum Support Price?

During the coming of the new Farmer Law, they say that they are not able to take advantage of the schemes, so in this blog we are going to know about MSP, what are the benefits they can get through MSP.

MSP Full Form

The full form of MSP is Minimum Support Price.

Meaning of MSP

MSP (Minimum Support Price) which is called “Minimum Support Price” in Hindi.

What is? MSP is a way to fix a fixed price and according to this method the government has to buy any crop at a fixed price and this scheme is very beneficial for a farmer because he never gets less than the fixed price.

Today, MSP is fixed in 22–23 types of crops in India and each crop has its own MSP value. MSP is levied only for cereal crops.

History of MSP

MSP was first started by the British in 1942 at the time of World War II. Then there was acute food shortage in the whole world, so MSP was started to reduce the food crop.

At that time the first food department was started and after 1947 independence that food department became a ministry which was called food ministry. Then India was facing acute food shortage.

When 1960 started all over the world, its effect was shown on India also. When the agricultural revolution started all over the world, its effect was shown in India as well.

Then India also wanted to specialize in food and finally MSP was started in 1966-1967.

The first MSP was placed over wheat at a price of Rs 54 per quintal.

Who determines the MSP?

On the basis of the recommendation of the Commission of Agricultural Costs and Prices (CACP), which is also called the Commission for Agricultural Costs and Prices in Hindi, the central government determines the price of MSP on selected crops. The government has entrusted the work of fixing the price of MSP to the CACP.

How to decide MSP?

In 2004, the Swaminathan Commission for Agricultural Reforms was formed. In that commission, Dr. MS Swaminathan used to tell the sources of fixing the MSP.

According to his formula, the value of MSP should be at least 50% more than the average production cost of cereals.

And when Modi government came in 2014, he took inspiration from Swaminathan Commission’s formula to fix MSP and fixed one and a half times (1.5) value of production cost as MSP.

The pricing of MSP is done by taking into account a comprehensive view of the overall structure of the economy along with some of the following factors.

  • how much did i produce
  • Variation in value of crop produced
  • Consistency in cost of production and market price of the crop produced
  • What will be the effect on the market price of the crop after 3-6 months
  • demand and supply of crops
  • impact on the livelihood of the population
  • inter-caste price of crops
  • Equality between farmers’ cost of production and prices received

What is the advantage of MSP?

  • The biggest advantage of MSP is that farmers get a fixed price even if the price of that grain has fallen in the market. If the consumption of any grain is more in the market, then the farmer can get profit by selling it in the market, but if the consumption in the market is less, then he can sell his grain at 1.5 times the profit fixed in the MSP. MSP always acts as a security.
  • With the help of this MSP, the government also uses the work to increase the production of the crop being produced. The government announces a good MSP price incentive on those crops which are being produced so that maximum production of those crops can be done.
  • When farmers will get maximum benefit due to MSP, they will be encouraged to use state-of-the-art equipments for agricultural work which will increase their production even more.


  1. What is the full form of MSP?

    Full Form of MSP (Minimum Support Price) Full Form of MSP Minimum Support Price Is

  2. When was MSP introduced?

    MSP launch 1966 This tradition started in me is going on till today.


In this blog, we have learned how you can take advantage of MSP, hope you have got all the clarity about it, but if you have any question related to this, then you can ask on the comment section.

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