Question

Which of the following statements are not true concerning the minimum support price?

• A. The government announces it before the sowing season.
• B. The government announces it after the sowing season.
• C. It acts as a safety net for the farmers.
• D. It is the price at which businesses buy the produce from the farmers.

Answer 1

Answer: (B), (D)

It is the price at which businesses buy the produce from the farmers.

The minimum support price (MSP) is the pre-announced price at which the government purchases food grains from farmers to create a buffer stock. MSP is declared by the government every year before the growing season. This encourages the farmers to produce the crops.