What do you mean by Minimum Support Price (MSP)? How will MSP rescue the farmers from the low income trap? (150 Words, 10 Marks)

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 Minimum Support Price (MSP) is a price fixed by the government for certain agricultural commodities to protect farmers from low market prices. The MSP is intended to serve as a floor price for these commodities, ensuring that farmers receive a minimum price for their produce, even in cases of overproduction or declining market prices.

The MSP helps farmers avoid the low-income trap by providing them with a guaranteed minimum price for their produce. This protects farmers from market fluctuations and price volatility, which can result in low prices and reduced income. With the assurance of a minimum price, farmers can make more informed decisions about what crops to grow, how much to produce, and when to sell.

Additionally, the MSP also acts as a signal to the market, indicating the government's willingness to intervene in case of low market prices. This can increase market confidence and help to stabilize prices, reducing the risk of price fluctuations for farmers.

In conclusion, the Minimum Support Price (MSP) is an important tool for ensuring that farmers receive a fair price for their produce and avoiding the low-income trap. The MSP provides farmers with stability and security, allowing them to make informed decisions and plan for the future with confidence

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