A lot of grain comes into the market at harvest time. One problem farmers faced was the low price of grain during this time. This means farmers were not able to sell grain at a high enough price to be able to repay their loans and continue using the new farming methods. They need to be protected from traders who might try to purchase the grains at low prices. Therefore, the government decided to set a Minimum Support Price (MSP). A Minimum Support Price is a price at which the farmers can sell their grain, if they want, to the government. The government sets the MSP so as to cover the cost of cultivation and allow a little bit of profit to the farmer. Because of the MSP, farmers are not forced to sell their grains at cheaper prices to the traders.
