How does Minimum Support Price help a farmer?

It protects the farmer from steep price falls.

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The buyers or bidders are forced to bid reasonable amounts.

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The government procures the produce at MSP if the bidders are unwilling to buy.

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MSP is always higher than what the bidders quote.

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Solution

The correct options are
A It protects the farmer from steep price falls.
B The buyers or bidders are forced to bid reasonable amounts.
C The government procures the produce at MSP if the bidders are unwilling to buy.
Minimum Support Price protects the farmer from steep falls in prices which could render the farmer penniless. At an auction, the buyers would be allowed to bid above the MSP. If no one buys the product, then the product would be procured by government agencies.

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Similar questions

Q. If traders are unwilling to buy at Minimum Support Price (MSP), government agencies like _____ buy from the farmers at the fixed MSP.

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Q. In each question below is given a statement followed by two conclusions numbered I and II. You have to assume everything in the statement to be true, then consider the two conclusions together and decide which of them logically follows beyond a reasonable doubt from the information given in the statement.
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Q16. Consider the following statements about Minimum Support Prices (MSP):

1. MSP is the price at which government purchases crops from the farmers, whatever may be the price for the crops.

2. The minimum support prices are announced by the Government of India at the beginning of the sowing season for certain crops on the basis of the recommendations of the Ministry of Agriculture.

Which of the above statements are correct?

Q. When is Minimum Support Price (MSP) declared by the government?

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