Write note on:
Minimum support price
Minimum support price − It is the pre-announced price at which the government purchases food grains from the farmers in order to create a buffer stock. The minimum support price is declared by the government every year before the growing season. This provides incentives to the farmers for raising the production of the crops.
The rising minimum support prices of rice and wheat have induced farmers to divert land from the production of coarse grains—the staple food of the poor—to the production of these crops. The rising minimum support prices have raised the maintenance cost of procuring food grains.