Which one of the following factors is not considered in determining th

Which one of the following factors is not considered in determining the Minimum Support Price (MSP) in India ?

Cost of production

Price trends in international and domestic markets

Cost of living index

Inter-crop price parity

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Answer is Wrong!

This question was previously asked in

UPSC CDS-2 – 2019

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The Minimum Support Price (MSP) in India is determined by the Commission for Agricultural Costs and Prices (CACP). Factors considered by CACP include the cost of production (A), trends in domestic and international markets (B), inter-crop price parity (D), terms of trade between agriculture and non-agriculture sectors, demand and supply situation, likely implications of MSP on consumers, environment, and overall economy. The Cost of Living Index (C) is related to general consumer price levels and wages, and while MSP can impact the cost of living (food inflation), the index itself is not a primary factor used *in the calculation* for setting MSP for agricultural produce.

MSP determination is a complex process involving multiple economic factors related to production costs, market dynamics, and overall economic balance.

Different cost concepts (A2, A2+FL, C2) are considered for calculating the cost of production (Factor A). Inter-crop price parity ensures that farmers are not incentivized to excessively grow one crop over others due to price differences, helping maintain agricultural diversity.

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