---
type: glossary_term
term: MSP
canonical_url: 'https://liberty-lighthouse.vercel.app/glossary/msp/'
markdown_url: 'https://liberty-lighthouse.vercel.app/glossary/msp.md'
definition: >-
  Minimum Support Price — the government's floor price for select crops,
  primarily wheat and rice. A guarantee that procurement agencies will buy at
  this price if market rates fall below.
aliases:
  - Minimum Support Price
  - MSPs
updated_at: '2026-04-26'
related_terms:
  - 'https://liberty-lighthouse.vercel.app/glossary/voucher-system.md'
---
# MSP

*Also known as: Minimum Support Price, MSPs*

Minimum Support Price — the government's floor price for select crops, primarily wheat and rice. A guarantee that procurement agencies will buy at this price if market rates fall below.

Introduced in 1965 as part of India's response to recurring food shortages, the Minimum Support Price was meant to insulate farmers from price volatility. In practice it has become a de facto procurement program for two crops, wheat and rice, in two states, Punjab and Haryana, while leaving most farmers in most regions outside its protection.

The MSP is set annually by the Commission for Agricultural Costs and Prices (CACP) and announced by the central government. Procurement agencies, primarily the Food Corporation of India and state agencies, purchase grain from farmers at the announced price.

Critics argue the system distorts cropping patterns, depletes groundwater, and fails to reach the small and marginal farmers it was originally meant to help. Defenders argue that without it, farmers in the procurement states would be at the mercy of trader cartels.

---

## Related

- Term: [voucher system](https://liberty-lighthouse.vercel.app/glossary/voucher-system.md) — A school-choice mechanism where the state funds a parent-redeemable voucher rather than directly funding government schools. Parents choose where to enrol; schools compete for funding.