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Q39 (CDS-II/2019) Economy › Agriculture & Rural Economy › Agricultural price policy Answer Verified

Which one of the following factors is not considered in deter- mining the Minimum Support Price (MSP) in India?

Result
Your answer: —  Â·  Correct: C
Explanation

The Commission for Agricultural Costs and Prices (CACP) determines the Minimum Support Price (MSP) based on several economic factors. Key determinants include the cost of production (A2, A2+FL, and C2), demand and supply dynamics, and price trends in both domestic and international markets [2]. Additionally, the CACP considers inter-crop price parity to prevent cropping pattern distortions, terms of trade between agricultural and non-agricultural sectors, and the likely impact on consumers and the general price level [1]. While the CACP evaluates the 'effect on cost of living' as a macro-economic implication of price policy, a specific 'Cost of Living Index' (typically used for dearness allowance for salaried employees) is not a standard primary factor used to calculate the MSP for crops. Instead, the focus remains on production costs, market parity, and ensuring a minimum 50% margin over the cost of production [2].

Sources

  1. [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 10: Agriculture - Part I > 10.3 Minimum Support Price (MSP) > p. 305
  2. [2] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 9: Agriculture > Objectives of MSP include: > p. 329
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SIMILAR QUESTIONS

IAS · 2020 · Q39 Relevance score: 2.50

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 ?

CAPF · 2014 · Q29 Relevance score: 1.64

Which of the statements given below is/ are correct ? 1. For the marketing year 2014-2015, the minimum support price (MSP) for wheat in India has been fixed at Rs. 1,400 / quintal 2. MSP is the rate at which the government sells the grains through the fair price shops Select the correct answer using the code given below : .

IAS · 2020 · Q33 Relevance score: 0.02

Which of the following factors/policies were affecting the price of rice in India in the recent past ? 1. Minimum Support Price 2. Government's trading 3. Government's stockpiling 4. Consumer subsidies Select the correct answer using the code given below :

CDS-II · 2018 · Q71 Relevance score: -0.16

With regard to the cabinet decision in July 2018, the percentage increase in Minimum Support Price (MSP) is maximum in which one of the following crops?