Which of the below are determinants while calculating Minimum Support Price MSP 1 Demand amp Supply ...........

Economic Affairs Agricultural Marketing and Prices

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Which of the below are determinants while calculating Minimum Support Price (MSP)?

1.Demand & Supply

2.Cost of Production

3.Risk of Disasters

4.Price trends in market

5.Inter-crop price parity

Select correct answer using the code given below:

1,2 and 5 only

1,2,4 and 5 only

2, 3, 4 and 5 only

All of the above

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Explanation:

1,2,4 and 5 only

Demand & Supply: The demand and supply dynamics play a role indirectly in determining the Minimum Support Price (MSP) by influencing market prices and government policies.

Cost of Production: The cost of production is a crucial determinant in setting the Minimum Support Price. It ensures that farmers receive remunerative prices for their produce.

Risk of Disasters: While the risk of disasters may influence agricultural policies and support mechanisms, it's not directly a determinant in calculating the Minimum Support Price.

Price trends in the market: Monitoring price trends in the market helps policymakers in understanding the market dynamics and setting MSPs accordingly.

Inter-crop price parity: Ensuring price parity among different crops is essential for maintaining a balanced agricultural economy and is considered in determining MSPs.

Therefore, options 1, 2, 4, and 5 are the correct determinants while calculating Minimum Support Price (MSP).