Consider the following statements: 1) In the case of all cereals, pulses and oil-seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India. 2) In the case of cereals and pulses, the MSP is fixed in any State\UT at a level to which the market price will never rise. Which of the statements given above is/are correct?

Both statements are false, so the answer is D. Statement 1 is wrong because MSP is a support price backed by procurement, but procurement is neither unlimited nor uniform across crops and states. Open-ended procurement at MSP is largely confined to wheat and rice, mainly in Punjab, Haryana and parts of Madhya Pradesh, Uttar Pradesh and Andhra Pradesh, through FCI and state agencies. For pulses and oilseeds, procurement is partial, state-specific and limited by budgets and storage, under schemes such as PM-AASHA.

Statement 2 is wrong because MSP is a floor, not a ceiling. Market prices can and do rise above MSP during supply shocks, and that is precisely when the government's procurement role changes. MSP is recommended by the Commission for Agricultural Costs and Prices (CACP) for 22 mandated crops and announced by the Union Cabinet.

Mains angle: the functioning of MSP, the debate on a legal guarantee for MSP, and the trade-off between farmer income security and fiscal and market distortions.

Trap: Students treat MSP as a fixed market price or assume procurement is universal. MSP is a floor; procurement is selective.