India has to do two things at once. It must give farmers a fair price for their crops. And it must give poor families cheap food. Three systems do this together. The Minimum Support Price (MSP) protects farmers. The Public Distribution System (PDS) delivers grain to families. The National Food Security Act (NFSA), 2013 makes cheap food a legal right. Exams ask about the bodies, crops, quantities and prices involved. This post explains them in simple words. It ends with 15 previous year questions.
Key Points (Quick Revision)
- MSP is announced by the Central government on the advice of the Commission for Agricultural Costs and Prices (CACP).
- MSP is announced for 22 mandated crops, and a Fair and Remunerative Price is fixed for sugarcane.
- The Food Corporation of India buys and stores grain; it was set up in 1965.
- The NFSA, 2013 covers up to 75% of the rural and 50% of the urban population.
- Eligible people get 5 kg of grain per person per month; Antyodaya families get 35 kg per family.
1. Minimum Support Price - what it is
MSP is the price at which the government promises to buy a crop from farmers. If the market price falls below it, the farmer can still sell to government agencies at the MSP.
- MSP is fixed before the sowing season, so farmers can plan.
- It is announced by the Centre after approval by the Cabinet Committee on Economic Affairs.
- It is based on the advice of the CACP.
MSP was first introduced for wheat in 1966-67, in the early years of the Green Revolution.
2. CACP and the MSP crops
The CACP was set up in 1965 as the Agricultural Prices Commission. It got its present name in 1985. It is an attached office of the Ministry of Agriculture and Farmers Welfare.
MSP is announced for 22 mandated crops:
| Group | Number | Examples |
|---|---|---|
| Kharif crops | 14 | Paddy, jowar, bajra, maize, tur, moong, urad, groundnut, soybean, cotton |
| Rabi crops | 6 | Wheat, barley, gram, masur, rapeseed-mustard, safflower |
| Commercial crops | 2 | Jute and copra |
For sugarcane, the Centre fixes a Fair and Remunerative Price (FRP) instead of an MSP.
While setting MSP, the CACP looks at the cost of production, demand and supply, market prices and the effect on consumers. Since 2018-19, the government has said MSP will be at least 1.5 times the cost of production (the A2+FL cost, which includes paid-out costs and family labour).
3. Procurement and the FCI
Buying grain from farmers is called procurement. It is done by the Food Corporation of India (FCI) and State agencies.
- FCI was set up in 1965 under the Food Corporations Act, 1964.
- It keeps a buffer stock of wheat and rice to meet shortages and control prices.
- Under decentralised procurement, some States buy, store and distribute grain themselves.
Procurement is highest for wheat and rice, mainly from States such as Punjab, Haryana, Madhya Pradesh and Chhattisgarh.
4. The Public Distribution System
The PDS is the network of ration shops (fair price shops) that sells grain at low prices.
- Rationing began during the Second World War, in the 1940s.
- In 1992, the Revamped PDS focused on hilly, remote and tribal areas.
- In 1997, the Targeted PDS began, giving more help to families below the poverty line.
- In 2000, the Antyodaya Anna Yojana (AAY) was launched for the poorest of the poor.
The Centre supplies grain to the States. The States identify families, issue ration cards and run the ration shops.
5. National Food Security Act, 2013
The NFSA turned food from a welfare scheme into a legal right.
- It covers up to 75% of the rural and 50% of the urban population.
- Priority households get 5 kg of foodgrain per person per month.
- Antyodaya Anna Yojana families get 35 kg per family per month.
- The Act set prices of ₹3, ₹2 and ₹1 per kg for rice, wheat and coarse grains. Since 2023, the grain has been given free of cost under the Pradhan Mantri Garib Kalyan Anna Yojana.
- The eldest woman of the household, aged 18 or above, is treated as the head of the family for the ration card.
- Pregnant women and lactating mothers get maternity benefit of at least ₹6,000, and children get nutritious meals.
The One Nation One Ration Card scheme lets a family take its ration from any ration shop in the country.
6. MSP vs PDS vs NFSA
| Point | MSP | PDS | NFSA |
|---|---|---|---|
| Helps | Farmers | Consumers | Consumers (legal right) |
| Main body | CACP advises; Centre decides | Centre and States, through ration shops | Centre and States |
| Key year | 1966-67 (wheat) | 1997 (Targeted PDS) | 2013 |
7. Previous year questions
- On whose advice does the government announce MSP? – Commission for Agricultural Costs and Prices (CACP)
- What was the CACP called when it was set up in 1965? – Agricultural Prices Commission
- For how many mandated crops is MSP announced? – 22
- What price is fixed for sugarcane instead of MSP? – Fair and Remunerative Price (FRP)
- For which crop was MSP first introduced in 1966-67? – Wheat
- Under which Act was the Food Corporation of India set up? – Food Corporations Act, 1964
- In which year was the Targeted Public Distribution System launched? – 1997
- In which year was the Antyodaya Anna Yojana launched? – 2000
- In which year was the National Food Security Act passed? – 2013
- What share of the rural population does the NFSA cover? – Up to 75%
- What share of the urban population does the NFSA cover? – Up to 50%
- How much grain does a priority household member get per month under NFSA? – 5 kg
- How much grain does an Antyodaya family get per month? – 35 kg
- Who is treated as the head of the household for NFSA ration cards? – The eldest woman aged 18 or above
- Which scheme lets a family take ration from any ration shop in India? – One Nation One Ration Card
8. How to revise this topic
Start with MSP: CACP advises, CCEA approves, 22 crops (14 kharif, 6 rabi, 2 commercial), FRP for sugarcane.
Next, fix the dates: CACP 1965, FCI 1965, MSP for wheat 1966-67, TPDS 1997, AAY 2000, NFSA 2013.
Then learn the NFSA numbers: 75% rural, 50% urban, 5 kg per person, 35 kg per AAY family, ₹3/2/1 per kg.
Finally, remember the link: MSP helps farmers, procurement fills FCI godowns, and PDS and NFSA deliver the grain to families.
9. Frequently Asked Questions
What is Minimum Support Price?
MSP is the price at which the government promises to buy a crop from farmers. It is announced by the Centre before the sowing season on the advice of the Commission for Agricultural Costs and Prices.
How many crops are covered under MSP?
MSP is announced for 22 mandated crops - 14 kharif, 6 rabi and 2 commercial crops. For sugarcane, a Fair and Remunerative Price is fixed instead.
What is the National Food Security Act, 2013?
It is a law that gives a legal right to subsidised foodgrains to up to 75% of the rural and 50% of the urban population. Priority households get 5 kg per person per month, and Antyodaya families get 35 kg per family.
What is the difference between PDS and TPDS?
The PDS is the network of ration shops that sells grain at low prices. The Targeted PDS, started in 1997, gives more help to poorer families instead of the same help to everyone.
What is the role of the FCI in food security?
The Food Corporation of India, set up in 1965, buys grain from farmers at MSP, stores it as buffer stock and supplies it for the PDS and welfare schemes.
For more Economy topics in simple language, see our Indian Agriculture and the Green Revolution, Agricultural Revolutions of India and Poverty and Unemployment posts, or browse the Economy section. Preparing for a central exam? Start with the FCI Category III guide or join the 100 Hour GS Course.