Rabi Crops Price Policy 2020-21 PDF

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Rabi Crops Price Policy 2020-21

The report contains the recommendations on Minimum Support Prices (MSP) for the mandated Rabi crops, namely, wheat, barley, gram, lentil, rapeseed & mustard, and safflower, and a set of non-price policy recommendations.

Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices. The minimum support prices are announced by the Government of India at the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP). MSP is price fixed by the Government of India to protect the producer – farmers – against excessive fall in price during bumper production years. The minimum support prices are a guaranteed price for their produce from the Government.

Determination of MSP

In formulating the recommendations in respect of the level of minimum support prices and other non-price measures, the Commission takes into account, apart from a comprehensive view of the entire structure of the economy of a particular commodity or group of commodities, the following factors:-

  • Cost of production
  • Changes in input prices
  • Input-output price parity
  • Trends in market prices
  • Demand and supply
  • Inter-crop price parity
  • Effect on industrial cost structure
  • Effect on the cost of living
  • Effect on the general price level
  • International price situation
  • Parity between prices paid and prices received by the farmers.
  • Effect on issue prices and implications for subsidy

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