Question

What role did the Minimum Support Price play in agriculture post the 1991 reforms?

• A. It was extended only to industrial crops.
• B. It was replaced by international pricing policies.
• C. It continued to protect farmers from price fluctuations.
• D. It was abolished entirely.

Answer 1

Answer:

C. It continued to protect farmers from price fluctuations.

Post the 1991 reforms, the Minimum Support Price (MSP) continued to protect farmers by ensuring they received a guaranteed price for certain crops, protecting them from price fluctuations in the market. The minimum support price (MSP) is an agricultural product price set by the Government to purchase directly from the farmer. Reason behind the idea of MSP is to counter price volatility of agricultural commodities due to the factors like variation in their supply, lack of market integration and information asymmetry