Consider the following statements:
Which of the statements given above is/are correct?
Statement 1 is incorrect. Procurement at Minimum Support Price (MSP) is not unlimited for all cereals, pulses, and oilseeds across all states and union territories. Open-ended procurement primarily applies to wheat and rice, and that too, predominantly in specific states. For other crops, procurement by government agencies is often limited, selective, or even absent, despite MSP declarations. Schemes like Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) were introduced to enhance procurement mechanisms for oilseeds and pulses, indicating the existing limitations in comprehensive procurement.
Statement 2 is incorrect. The Minimum Support Price (MSP) functions as a floor price, ensuring a minimum remunerative price for farmers. It does not act as a price ceiling. Market prices for agricultural commodities, including cereals and pulses, can and often do rise above the MSP, particularly during periods of high demand, supply shortages, or adverse weather conditions. Therefore, the assertion that market prices will never rise above MSP is incorrect.