Press Enter

Share with your friends and help them crack UPSC!

Or Share on


Correct Option is 1, 2, 3 and 4

Justification: While recommending price policy of various commodities under its mandate, the Commission keeps
in mind demand and supply, cost of production, price trends in the market, both domestic and international,
inter-crop price parity (i.e. if one crop is too steeply priced as against the other), terms of trade (price ratios)
between agricultural and non-agricultural sectors, likely implications of MSP on consumers of that product,
besides ensuring optimal utilization of natural resources like land and water.
It may be noted that cost of production is an important factor that goes as an input in determination of MSP but it
is not the only factor. Thus, recommending MSPs of various crops is not a ‘cost plus’ pricing exercise, though cost
is an important determinant.
Learning: CACP was set up with a view to evolving a balanced and integrated price structure, is mandated to
advise on the price policy (MSP) of 23 crops.
These include seven cereal crops (paddy, wheat, jowar, bajra, maize, ragi and barley), five pulse crops (gram, tur,
moong, urad and lentil), seven oilseeds (groundnut, sunflower seed, soyabean, rapeseed—mustard, safflower,
niger seed and sesamum), copra (dried coconut), coon, raw jute and sugarcane fair and remunerative prices (FRP)
instead of MSPA.
While recommending MSPs/FRP, CACP is called upon to ensure that the production patterns are broadly in line
with the overall needs (demand) of the economy.
Before preparing the pricing policy reports, the Commission seeks views of various state governments, concerned
national organizations and ministries  

Get access to all of our verified questions