UPSC Prelims 2020 · Question 79 of 100
UPSC Prelims 2020 question on MSP Procurement Cereals Pulses Oilseeds
- ExamUPSC CSE
- Year2020
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicAgriculture Economy
- DifficultyEasy
- TypeStatement
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?
Show answer
Answer: D. Neither 1 nor 2
Verdict
Correct statements: Neither 1 nor 2 → Option (d).
Statement by statement
Statement 1 – INCORRECT: Based on the recommendations of the Commission for Agricultural Costs and Prices (CACP), the Department of Agriculture and Cooperation, Ministry of Agriculture And Farmers' Welfare, declares Minimum Support Prices (MSP) for 22 mandated crops, and Fair and Remunerative Price (FRP) for Sugarcane. However, procurement at MSP is NOT unlimited in all States/UTs — it depends on the availability of government machinery, storage capacity, and state-specific policies. Many states do not have procurement infrastructure for all crops. Hence statement 1 is not correct.
Statement 2 – INCORRECT: The idea behind MSP is to give guaranteed price and assured market to the farmers and protect them from the price fluctuations and market imperfections. The MSP is NOT fixed at a level to which the market price will never rise — the market price can and does exceed MSP during scarcity or high-demand periods. MSP is a floor price (minimum), not a ceiling. Hence statement 2 is not correct.