UPSC CSE Prelims
MSP and Procurement Previous Year Questions (PYQs)

Detailed Explanation:

Answer: Option 3 — All three

All three statements about niger (Guizotia abyssinica) are correct. The Government of India provides MSP for niger seeds as it is one of the 14 Kharif crops under the MSP scheme. Niger is indeed cultivated as a Kharif crop, primarily in hilly and tribal areas with poor soils. Niger seed oil is traditionally used for cooking by tribal communities in states like Odisha, Chhattisgarh, and Madhya Pradesh.

✅ Statement 1 – Correct: Niger seed is one of the 14 Kharif crops for which the Government of India announces Minimum Support Price (MSP) through the Commission for Agricultural Costs and Prices (CACP).

✅ Statement 2 – Correct: Niger is primarily cultivated as a Kharif (monsoon season) crop in India, especially in hilly and tribal regions with poor soil conditions.

✅ Statement 3 – Correct: Niger seed oil is traditionally used for cooking by tribal communities in various states, and also has other uses like lighting, lubrication, and in soap making.

📝 Short Notes: Niger Crop & MSP

• Niger (Guizotia abyssinica): A minor oilseed crop belonging to the Asteraceae family, also known as ramtil or black sesame in some regions.
• Cultivation Season: Primarily grown as a Kharif crop (sown in June-July, harvested in October-November).
• Growing Regions: Mainly cultivated in Odisha, Chhattisgarh, Madhya Pradesh, Maharashtra, Karnataka, and Jharkhand.
• Soil Requirements: Can grow in poor, marginal soils; suitable for hilly and tribal areas where other crops may not thrive.
• MSP Coverage: Part of 22 mandated crops (14 Kharif + 6 Rabi + 2 other commercial crops) for which Government announces MSP.
• Uses: Oil extraction for cooking (especially by tribal communities), lighting, soap making, and industrial purposes; oil cake used as cattle feed and manure.

Detailed Explanation:

Answer: Option 4 — 1, 2, 3 and 4

All four factors significantly influence rice prices in India. The government employs multiple policy tools—MSP guarantees, FCI procurement and sales, buffer stock management, and subsidized distribution through PDS—creating a complex web of interventions that collectively shape market availability and consumer prices.

✅ Statement 1 – Minimum Support Price (MSP): Correct MSP guarantees a floor price for farmers; when procurement occurs at MSP levels, it reduces market supply and can push up consumer prices.

✅ Statement 2 – Government's Trading: Correct FCI and other government agencies' procurement and sale decisions directly affect market supply dynamics and rice availability in the open market.

✅ Statement 3 – Government's Stockpiling: Correct Buffer stock management affects supply; depleted stocks can create shortages and price spikes, while excessive stocks can depress prices.

✅ Statement 4 – Consumer Subsidies: Correct Subsidized rice through PDS increases effective demand and can exert upward pressure on overall market prices by boosting consumption.

Detailed Explanation:

Answer: Option 3 — Procurement incidentals and distribution cost

The economic cost of food grains to the Food Corporation of India (FCI) comprises the Minimum Support Price (MSP) and bonus paid to farmers, plus all expenses incurred during procurement and distribution. Procurement incidentals include costs like commission to agents, bagging materials, labor charges, and transportation from collection centers to storage depots. Distribution costs cover transportation to fair price shops, handling charges, storage losses, and delivery expenses. While interest costs and godown charges are part of overall FCI operations, the specific economic cost formula focuses on procurement incidentals and distribution costs as the primary additional components beyond MSP.

📝 Short Notes: FCI Economic Cost Components

Detailed Explanation:

Answer: Option 2 — 2, 4, 5 and 6 only

The Cabinet Committee on Economic Affairs (CCEA) announces Minimum Support Price (MSP) for 22 mandated crops, which include cereals, pulses, oilseeds, and commercial crops. Among the given options, only Barley (cereal), Finger millet (cereal), Groundnut (oilseed), and Sesamum (oilseed) are covered under the MSP regime. Areca nut, Coffee, and Turmeric are plantation/spice crops not included in the MSP list.

✅ Statement 1 (Areca nut) – Incorrect: Areca nut is a plantation crop and is not included in the 22 mandated crops for MSP.
✅ Statement 2 (Barley) – Correct: Barley is one of the seven cereals for which MSP is announced.
✅ Statement 3 (Coffee) – Incorrect: Coffee is a plantation/beverage crop not covered under MSP.
✅ Statement 4 (Finger millet) – Correct: Finger millet (Ragi) is a cereal included in the MSP list.
✅ Statement 5 (Groundnut) – Correct: Groundnut is one of the seven oilseeds covered under MSP.
✅ Statement 6 (Sesamum) – Correct: Sesamum is an oilseed for which MSP is announced.
✅ Statement 7 (Turmeric) – Incorrect: Turmeric is a spice crop not among the 22 mandated crops for MSP.

📝 Short Notes: Minimum Support Price (MSP) Crops

• CCEA Role: The Cabinet Committee on Economic Affairs announces MSP based on recommendations from the Commission for Agricultural Costs and Prices (CACP).
• Excluded Crops: Plantation crops (coffee, tea, rubber, areca nut), spices (turmeric, cardamom), and most horticultural crops are not covered under MSP.
• MSP Objective: To provide assured prices to farmers and protect them from price fluctuations, ensuring minimum remuneration for their produce.

Detailed Explanation:

Fair and Remunerative Price (FRP) for sugarcane is approved by the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister.

The Commission for Agricultural Costs and Prices (CACP) recommends the FRP based on cost of production, input costs, and various economic factors, but the final approval rests with CCEA.