The price declared by the Government every year before the sowing season to provide incentives to the farmers is called

The price declared by the Government of India every year before the sowing season to provide incentives to farmers is the Minimum Support Price (MSP) [2]. MSP serves as a price floor to protect agricultural producers against sharp declines in market prices and ensures they receive a remunerative price for their produce. It is announced twice a year for Kharif and Rabi crops based on the recommendations of the Commission for Agricultural Costs and Prices (CACP) [2]. While MSP provides an incentive for production and food security, it is distinct from the 'Issue Price,' which is the rate at which food grains are distributed to states for the public distribution system [3]. Buffer stocks are the food grain reserves maintained by the government, and MSP acts as the procurement rate to build these stocks [4].

Sources

1. [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 10: Agriculture - Part I > 10.3 Minimum Support Price (MSP) > p. 305
2. [2] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 9: Agriculture > Objectives of MSP include: > p. 328
3. [3] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 9: Subsidies > 9.5.1 Food Corporation of India (FCI) > p. 293
4. [4] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 10: Agriculture - Part I > 10.3 Minimum Support Price (MSP) > p. 306