Answer: 

Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices. The minimum support prices are announced by the Government at the beginning of the sowing season for 23 notified crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).

• Protect farmers from price fluctuations: MSP helps in rescuing farmers from low-income trap by providing fixed income by addressing the vagaries of price instability in the market.
• Diversification of crops: Announcement of MSP before each cropping encourages the farmers to grow these diverse notified crops to maximize their income. 
• Prevents Distress-Sale: It prevents farmers from selling their produce at throw-away prices as MSPs ensure that farmers receive a certain “minimum” remuneration so that their costs of cultivation (and some profit) can be recovered. 
• Helps informed decision making: Advance information about MSP helps the farmer to make an informed decision about which crop to sow for maximum economic benefit. 
• Acts as a benchmark for private buyers: MSPs create the benchmark for farm prices not just in those commodities for which they are announced, but also in crops that are substitutes.

• Encourage Production: In the era of the Green Revolution, MSPs incentivized adequate production of staple food grains to eliminate shortages.
• Address supply shortage: MSPs aim to boost crops in short supply, such as pulses, crucial for Indian nutrition. 
• Risk Mitigation: The MSP acts as a risk mitigation tool by assuring farmers of a minimum price even in unfavorable circumstances thus ensuring production of notified crops. 
• Public food programs:  MSP helped the Public Distribution System (PDS) evolve as a system of management of scarcity through distribution of foodgrains at affordable prices.

• Providing Legal status: Minimum support prices (MSP) should be made legal by providing a statutory backing to make it available across India. 
• Making it inclusive: The MSP policy benefits farmers only in a handful of states. For example, Punjab and Haryana farmers have benefited the most from MSP due to the Green Revolution’s legacy
• Increasing its Coverage: For example, the percentage of farmers benefiting from MSP in India is just 5.6% and the value of agri-produce benefiting from MSP to a only 2.2%
• Notifying More Crops under MSP: Including other crops under the ambit of MSP would check the serious imbalances of water and land resources and boost crop diversification thus reducing costly imports. 
• Rationalization of MSP: By implementing the Swaminathan Commission recommendation of C2+50% (C2 or comprehensive cost of production). 

Ineffective implementation of MSP and ‘non-procurement’ of all the crops at the MSP are the main concerns of farmers. The Government should provide a fair return to farmers while keeping the interest of consumers in a way that prices of food and other agricultural commodities are kept at a reasonable level.