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UPSC Prelims 2020 · Agriculture · Farm Money
Consider the following statements:
- In the case of all cereals, pulses and oil-seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India.
- In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise.
- (a) 1 only
- (b) 2 only
- (c) Both 1 and 2
- (d) Neither 1 nor 2
Show the answer and explanation
Answer: (d) Neither 1 nor 2
Both overstate MSP: it is neither unlimited nor a ceiling.
Statement by statement
1. ✗ WRONG — procurement is limited Open-ended buying happens mainly for wheat and rice, in some States. Pulses and oilseeds are bought under price-support schemes (PM-AASHA), capped at a share of each State’s output.
2. ✗ WRONG — markets often go above MSP MSP is a floor: it protects farmers if prices crash. Market prices frequently rise above it — for many pulses they have in recent years.
Why the others are wrong
(a) Procurement is not unlimited for all crops.
(b) MSP is a floor price, not a ceiling.
(c) Accepts both — the absolute words “unlimited” and “never” should have warned you.
The trap
Both statements use absolute words — “unlimited”, “never”. In MSP questions, absolutes are almost always wrong.
🔒 MSP = a floor price. Big procurement = wheat and rice (FCI). Pulses and oilseeds = capped price support.