Write a short note on Minimum Support Price.

The Government of India to ensure food availability carefully designed a food security system. This system has two components - buffer stock and public distribution system.

● Buffer stock is the stock of food grains like wheat and rice secured by the Indian Government through the Food Corporation of India (FCI).

● Wheat and rice are purchased by the government from the farmers and a pre-announced price is paid to them. This price is announced by the government every year before every sowing season to provide incentives to farmers for raising production.This price is known as the Minimum Support Price (MSP).

● The food grains are then stored in granaries.

● Buffer stock is created to distribute the food grains in the food deficit areas and among the poorer strata of society at a lower price than the market price which is also known as issue price.

Buffer stock is also helpful in times of natural calamities to provide food to the population during adverse conditions.