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?

The correct option is Neither 1 nor 2.

Let us analyze each statement step-by-step to understand why both are incorrect:

Statement 1 is incorrect:
The Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in agricultural prices. While the government announces MSPs for 22 mandated crops (including cereals, pulses, and oilseeds) and Fair and Remunerative Price (FRP) for sugarcane, procurement at MSP is not unlimited. Procurement is typically linked to the requirements of the Public Distribution System (PDS) and buffer stock norms, and it varies significantly across states, crops, and seasons. There are practical and financial limitations, as well as storage constraints, which prevent unlimited procurement of all these crops across all States and Union Territories.

Statement 2 is incorrect:
The MSP is fixed by the government based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). It serves as a price floor or a safety net for farmers. The MSP is not fixed at a level to which the market price can "never rise". In fact, during periods of low supply, high demand, or export opportunities, the market prices of cereals and pulses frequently rise well above the announced MSP. Therefore, the statement that the market price will never rise to the level of MSP is factually incorrect.

Since both Statement 1 and Statement 2 are incorrect, the correct option is indeed "Neither 1 nor 2".