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HomeBlogsDifference Between MSP and Mandi Bhav | A Farmer's Guide
user_Palak Rohra
Palak Rohra
जून 27

Difference Between MSP and Mandi Bhav | A Farmer's Guide

MSP vs mandi bhav
MSP vs mandi bhav

For millions of farmers across India, MSP and mandi bhav are not just terms. They are the building blocks of their financial lives: income, investment, and, ultimately, survival. Both concepts refer to the price of agricultural produce. However, they are fundamentally different concepts and have different meanings for the farmer, the market, and the consumer. Knowing the difference between Minimum Support Price (MSP) and mandi bhav or market price is essential to understanding the complexity of India's agricultural economy.

Minimum Support Price (MSP)

 

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The Minimum Support Price (MSP) is a concept introduced by the government to protect farmers from high losses during periods of excessive price fluctuations. An MSP can also be described as a guaranteed base price on certain crops, and the farmers are guaranteed by the MSP that they will not be offered below a certain price, irrespective of market conditions.

 

How is MSP Determined?

The MSP is a concept that is planned and enforced by the Commission for Agricultural Costs and Prices (CACP). Various factors are considered while deciding the MSP. Some of the factors considered are the cost of production, demand and supply, prices of substitutes, inflation and its impact, cost of transportation, environmental factors, and many more.

 

Objectives of MSP

MSP is brought into existence to improve various factors and bring little reliability for farmers. Some of the primary objectives are:

Income security: It protects farmers from the unpredictable prices of any crop and offers them the reliability to work harder. Unpredictable prices might not even cover the investment of a farmer. It shows the importance of MSP for farmers.

Encourage the farmers to produce: It brings reliability among farmers, and the consistent earnings help them to work hard and earn more, along with meeting the needs and demands of the population.

Promotes the scope of agriculture: It encourages the overall production. Also, it promotes the utilisation of natural factors that are useful for agricultural purposes. It involves more employment and promotes the development of the nation overall.

Currently, MSPs are applied for some crops such as rice, maize, cotton, pulses, wheat, barley, gram, mustard, jute, and copra.

 

Mandi Bhav

 

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MSP is the actual or real-time price, which agricultural commodities trade in different agricultural produce markets throughout India. It is the price that farmers receive when they sell their produce in an Agricultural Produce Market Committee (APMC) mandi or local mandis. You can look at the Madhya Pradesh mandi rates and those of other mandis to compare, as they change frequently. It keeps you updated on mandi bhav. 

 

How is mandi bhav determined?

Mandi Bhav is decided by considering various factors affecting the market. Some of these are:

Demand and supply: These two are the crucial interrelated factors that rely on each other. When there is high demand, mandi prices rise, while when the supply is more, the market rates get depressed.

Quality of products: Undamaged and high-quality products are considered of high value as they are rare. It is suggested that farmers must focus on the overall quality.

Costs: It is another crucial factor affecting the mandi bhav. There are various costs involved in the complete procedure, such as transportation costs and storage costs.

Loss during the agricultural process: In the entire process of farming, there are various potential risks and stages where losses can occur. Some of them are weather and improper handling.

 

Key Differences Between MSP and Mandi Bhav

 

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To understand the difference between MSP and mandi bhav, go through the various aspects to understand in detail. Here are some of the factors you can look at and get insights:

 

1. Nature of the price

MSP: It is a guaranteed price considered as a base or foundation for crops. The government considers various factors while deciding the price. It is a minimum fixed price. The price of a particular crop may be higher than MSP but not lower.

Mandi Bhav: It is the current market price of the crops or commodities in particular mandi is called the mandi bhav on that day. It is the actual price that keeps changing from time to time. For reference, you can check Surat mandi rates daily and compare the price.

 

2. When is it informed?

MSP: MSP price is decided and declared at the sowing season for crops. It provides farmers the price assurance and helps them make better decisions.

Mandi Bhav: When the crops are harvested and ready to sell, the mandi bhav is calculated based on the expenses. It usually changes depending on the various factors such as demand and supply, the cost incurred, or any loss faced. The price of the mandi depends on these factors and may change frequently. For real-time updates, you can check the price of Jabalpur mandi rates or any other mandi nearby on the Shuru app.

 

3. Primary Objectives

MSP: The primary objective of this concept is to protect farmers and help them get a base price for reliability, irrespective of changes in the market.

Mandi Bhav: It is the concept designed to adapt the market changes. Mandi bhav or market prices are decided while considering the real-time market situations.

 

4. The areas and commodities covered

MSP: It is the concept that is for a few crops like wheat and rice, which are the most commonly grown in high quantities. There are 20 other crops on which the MSP is applicable.

Mandi Bhav: The concept is applied to all agricultural commodities traded in mandis, whether they are covered under MSP or not. It reflects the prices of all crops, fruits, and vegetables.

 

Conclusion

Understanding the fundamental difference between MSP and mandi bhav is important for every farmer, trader, and every individual who is directly or indirectly connected to agriculture or crops. Price is basic and the primary factor where policy and market dynamics are connected. It ultimately shapes the economic well-being of India from an agricultural aspect.

Frequently Asked Questions

1. What is the difference between MSP and mandi bhav?

Ans. MSP is the minimum selling price, which is fixed by the government right at the beginning, considering different factors. It is not for every commodity, and commodities that have the concept of MSP can also be sold at higher prices. Mandi bhav is the final price of the commodity, just like MSP on considering all the costs incurred and the profits of the farmers or sellers. The main difference between the two is that the MSP is the minimum price, and the mandi bhav is the final price.

2. How can I get updates on the mandi bhav?

Ans. To get real-time updates along with transparency, use the Shuru app and start searching for the prices of any commodity by searching keywords such as Punjab mandi bhav or Uttarakhand mandi bhav. The app helps you look at the prices of mandis of different cities by searching for the keyword with the city, like Surat mandi bhav. The platform not only offers the information, but also helps you get other relevant updates and get connected with sellers.

3. How is MSP beneficial?

Ans. MSP is the concept brought into existence to support the farmers, assure them that they are at least offered their investment costs and minimal returns. Primarily, this assurance builds reliability and motivates them to focus more on production in various aspects, like improving quality and producing in high quantities.