Question map
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 ?
Explanation
The correct answer is Option 4 (Neither 1 nor 2) because both statements are factually incorrect within the framework of India's agricultural policy.
- Statement 1 is incorrect: While the government announces MSP for 22 mandated crops (including cereals, pulses, and oilseeds), unlimited procurement is not a legal guarantee. In practice, open-ended procurement is largely restricted to wheat and rice in specific surplus states. For pulses and oilseeds, procurement is typically capped (often at 25% of marketable surplus) under schemes like PSS (Price Support Scheme).
- Statement 2 is incorrect: MSP is designed as a price floor to protect farmers during gluts; it is not a ceiling. Market prices frequently rise above the MSP based on demand-supply dynamics, international trends, or production shortfalls. The assertion that market prices will "never rise" above MSP is economically fallacious and contradicts market realities.
Therefore, since both statements contain absolute and incorrect claims, Neither 1 nor 2 is the right choice.
PROVENANCE & STUDY PATTERN
Guest previewThis question masquerades as a factual query but is actually a test of 'Economic Common Sense' and extreme wording. It punishes aspirants who memorize the list of MSP crops without understanding the operational mechanics of FCI procurement versus the PM-AASHA scheme limitations.
This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.
- Statement 1: Does Indian procurement policy allow unlimited procurement at the Minimum Support Price (MSP) for all cereals, pulses and oilseeds in any State/Union Territory?
- Statement 2: Is the Minimum Support Price (MSP) for cereals and pulses in India fixed at a level that market prices will never rise above?
- Directly asserts the claim about unlimited procurement at MSP for all cereals, pulses and oilseeds.
- Specifies the geographic scope as "any State/UT of India," matching the statement exactly.
Explicitly states procurement policy is 'open ended' (no limit) for wheat and paddy offered by farmers within stipulated period and quality.
A student could generalize that 'open ended' procurement exists for major cereals (wheat/paddy) and then check whether that language appears for other crops/states to judge the broader claim.
Says MSP is same nationwide and 'there is no limit for procurement in terms of volume/ quantity' provided stock meets FAQ ā context is food grains (wheat and rice).
Compare this explicit 'no limit' formulation for food grains with official texts for pulses/oilseeds to see if the same rule applies.
Notes MSP is declared for 25 crops but government 'procures mostly wheat and rice' and only some other crops (e.g., pulses) are procured for buffer stockāimplying procurement practice varies by crop.
Use this pattern to suspect that unlimited procurement may be limited to certain cereals, so check procurement practice variations across crops/states.
Describes PM-AASHA (2018) as an umbrella to address MSP gaps for pulses and oilseeds, and that one component (PSS) involves physical procurement by central nodal agenciesāsuggesting specialized schemes rather than an automatic openāended procurement for these crops.
A student could infer that pulses/oilseeds have distinct procurement mechanisms (not necessarily openāended) and verify scheme rules/state implementation to test the universal 'unlimited' claim.
Describes Price Deficiency Payment Scheme (PDPS) for all MSPānotified oilseeds where difference between MSP and market price is paid to farmerāindicating an alternative to physical procurement for oilseeds.
From this, one can deduce that for oilseeds, support may be through cash compensation rather than unlimited MSP procurement; check whether PDPS replaces or complements open procurement in states.
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