About MSP

• Minimum Support Price (MSP) is a form of market intervention by the Government to insure agricultural producers against any sharp fall in farm prices. 
• The minimum support prices are announced by the Government 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). 

About CACP

• The Commission for Agricultural Costs & Prices is an attached office of the Ministry of Agriculture and Farmers Welfare. It came into existence in 1965.
• It is mandated to recommend MSPs to incentivize the cultivators to adopt modern technology and raise productivity and overall grain production in line with the emerging demand patterns in the country.
• As of now, CACP recommends MSPs of 23 commodities, which comprise 7 cereals (paddy, wheat, maize, sorghum, pearl millet, barley and ragi), 5 pulses (gram, tur, moong, urad, lentil), 7 oilseeds (groundnut, rapeseed-mustard, soyabean, seasmum, sunflower, safflower, niger seed), and 4 commercial crops (copra, sugarcane, cotton and raw jute).
• CACP submits its recommendations to the government. The Cabinet Committee on Economic Affairs (CCEA) takes a final decision on the level of MSPs and other recommendations made by CACP.

Why in News?

• While presenting the Union Budget 2022-23 in the Parliament, the Union Minister for Finance and Corporate Affairs Nirmala Sitharaman said the procurement of wheat in Rabi 2021-22 and the estimated procurement of paddy in Kharif 2021-22 will cover 1208 lakh metric tonnes of wheat and paddy from 163 lakh farmers, and `2.37 lakh crore direct payment of MSP value to their accounts.

Reference:

1. https://pib.gov.in/PressReleasePage.aspx?PRID=1794146