Explanation:

The minimum support prices are announced by the Government of India at the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP). MSP is price fixed by Government of India to protect the producer - farmers - against excessive fall in price during bumper production years. 

The economic cost of food grains procured by the FCI is a total of MSP and bonus (if any) paid to the farmers plus the procurement incidentals and distribution cost.

The procurement incidentals are the initial costs incurred during procurement of foodgrains. The distribution costs include freight, handling charges, storage costs in godowns, losses during transit etc.