Context:

Amidst the lockdown, the Union government has asked all States / UTs asked to implement Market Intervention Scheme to ensure remunerative prices to farmers for perishable crops.

About:

• The Market Intervention Scheme (MIS) is an ad-hoc scheme under which are included horticultural commodities and other agricultural commodities which are perishable in nature and which are not covered under the minimum price support scheme.
• It aims to intervene the market to protect the growers of their commodities from making distress sale in the event of a bumper crop during the peak arrival period when the prices tend to fall below economic levels and cost of production.
• In order to protect the growers of these horticultural/agricultural commodities from making distress sale in the event of bumper crop during the peak arrival period when prices fall to very low level, Government implements M.I.S. for a particular commodity on the request of a State Government concerned.
• Losses suffered are shared on 50:50 basis between Central Government and the State.
• Market Intervention Scheme works in a similar fashion to Minimum Support Price based procurement mechanism for food grains.

Minimum Support Price (MSP):

• Minimum support price (MSP) is one of the instruments of Agricultural Price Policy (APP).
• APP basically means government intervention to influence agricultural productivity and/or farm input prices.
• The kind and degree of intervention (or the policy instruments and their objectives) vary with the stage of agricultural development.
• The basic intent of announcing MSP before the sowing season is to help farmers take sowing decision keeping in mind that if they are not able to get a reasonable price by selling in the market, at least they will be able to get the MSP.
• In that sense, MSP is an assured or guaranteed price (insured price).