For decades, India’s farmers have faced the uncertainties of weather, fluctuating markets, and inconsistent incomes. A single spell of unseasonal rain or a dip in market prices could undo months of hard work, leaving small and marginal farmers vulnerable to debt and despair.
The Minimum Support Price (MSP) system, introduced as a shield against such volatility, guarantees that farmers receive a fixed, government-declared rate for their produce. Whether it’s wheat, paddy, pulses, or oilseeds, MSP ensures farmers never have to sell below cost, offering stability in a sector heavily dependent on unpredictable factors.
For instance, in the upcoming season, a wheat grower will receive Rs 2,585 per quintal, even if market prices drop, while paddy farmers are guaranteed Rs 2,369 per quintal for common paddy. This assurance not only protects incomes but also gives farmers the confidence to invest in better seeds, irrigation, and technology.
The science behind the support
Each year, the government announces MSPs for 22 mandated crops, based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). The CACP considers multiple factors, cost of production, global market trends, demand-supply balance, and inter-crop parity, before fixing rates.
A crucial aspect of the MSP formula is that it guarantees a minimum of 50 percent profit over the cost of production, ensuring farmers get fair value for their inputs. These costs include not just labour and seeds but also rent for leased land, irrigation, diesel, depreciation, and even family labour, recognising the collective effort of rural households in farming.
Since 2018-19, the government has consistently maintained the benchmark of MSP being at least 1.5 times the production cost, fulfilling the promise made in the Union Budget of that year.
What’s new this season
The Cabinet has approved an increase in MSPs for all Rabi crops for the Marketing Season 2026-27 and Kharif crops for 2025-26, aimed at ensuring remunerative returns and promoting crop diversification.
Rabi Crops (2026-27)
Wheat: Rs 2,585 per quintal (up by Rs 160), offering a 109 percent margin over the production cost of Rs 1,239.
Barley: Rs 2,150 per quintal, up by Rs 170.
Gram: Rs 5,875 per quintal, with a margin of 59 percent.
Lentil (Masur): Rs 7,000 per quintal, marking an increase of Rs 300.
Rapeseed & Mustard: Rs 6,200 per quintal, reflecting a margin of 93 percent.
Safflower: Rs 6,540 per quintal, with a Rs 600 increase, the highest among Rabi crops.
Kharif Crops (2025-26)
Paddy (Common): Rs 2,369 per quintal, up by Rs 69.
Bajra: Rs 2,775 per quintal, with a 63 percent margin over production cost.
Tur (Arhar): Rs 8,000 per quintal, up by Rs 450.
Urad: Rs 7,800 per quintal, up by Rs 400.
Cotton (Long Staple): Rs 8,110 per quintal, with an increase of Rs 589.
Ragi: Rs 4,886 per quintal, up by Rs 596.
For Kharif crops, nigerseed saw the steepest increase of Rs 820 per quintal, while bajra, maize, and pulses continue to offer some of the highest returns to farmers.
Procurement expansion: More crops, more farmers
For RMS 2026-27, procurement is estimated at 297 lakh metric tonnes, translating into Rs 84,263 crore directly reaching farmers’ accounts through digital transfers.
Between 2014-15 and 2024-25, procurement volumes have surged from 761.40 LMT to 1,175 LMT, and payouts at MSPs have tripled from Rs 1.06 lakh crore to Rs 3.33 lakh crore. The number of farmers benefitting from MSP procurement also rose from 1.63 crore in 2021-22 to 1.84 crore in 2024-25.
The Food Corporation of India (FCI), along with state agencies, plays a crucial role in ensuring the timely procurement of wheat, paddy, and coarse grains. Each season, procurement estimates are determined in consultation with state governments based on projected production and marketable surplus.
PM-AASHA: Protecting farmers from price crashes
The Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) is the government’s umbrella initiative to ensure that farmers receive fair prices even when markets fail.
The Price Support Scheme (PSS), a key component of PM-AASHA, is activated whenever the market price of notified pulses, oilseeds, or copra falls below the MSP. Procurement is handled by NAFED (National Agricultural Cooperative Marketing Federation of India Ltd.) and NCCF (National Cooperative Consumers’ Federation of India Ltd.), which purchase directly from pre-registered farmers meeting quality standards.
The government has extended PM-AASHA till 2025-26, increasing its financial guarantee from Rs 45,000 crore to Rs 60,000 crore.
From imports to ‘Atmanirbhar Bharat’
Prime Minister Narendra Modi has set a clear target, India must become self-sufficient in pulses by December 2027, ending decades of import dependence.
Under this vision, the government has committed to procuring 100 percent of the domestic production of tur (arhar), urad, and masoor till 2028-29.
By March 2025, the government had already procured 2.46 lakh metric tonnes of tur from five states, Andhra Pradesh, Gujarat, Karnataka, Maharashtra, and Telangana, benefiting over 1.71 lakh farmers.
Pulses procurement under MSP has seen an astonishing 7,350 percent rise, from 1.52 lakh MT (2009-14) to 82.98 lakh MT (2020–25). Oilseeds procurement, too, has surged by over 1,500 percent, reinforcing India’s journey toward nutritional and economic security.
A decade of expansion
The data reveals a transformation in India’s agricultural landscape:
Paddy procurement rose from 4,590 LMT (2004-14) to 7,608 LMT (2014-25).
MSP payments for paddy tripled from Rs 4.44 lakh crore to Rs 14.16 lakh crore in the same period.
For all 14 Kharif crops, MSP payments grew from Rs 4.75 lakh crore to Rs 16.35 lakh crore.
Wheat procurement reached 266 LMT in RMS 2024-25, surpassing previous years, benefiting over 22 lakh farmers with ₹0.61 lakh crore paid directly to their accounts.
Transparency and trust in MSP payments
The government has made major strides in digitising procurement to ensure transparency and faster payments:
e-Samriddhi (by NAFED) and e-Samyukti (by NCCF) platforms enable farmers to register online, upload land and bank details, select procurement centres, and receive direct payments via DBT, cutting out middlemen.
The Kapas Kisan App, developed by the Cotton Corporation of India, allows cotton growers to self-register, book slots, and track payment status in real time, with multilingual support.
These digital systems have reduced delays, prevented corruption, and ensured that MSP benefits reach farmers directly and promptly.
MSP as a pillar of national resilience
The government’s MSP reforms are not just about prices, they are about transforming agriculture into a self-reliant, technology-driven, and globally competitive sector.
By ensuring at least 50 percent profit margins, expanding procurement, and leveraging technology, MSP has evolved into an instrument for inclusive rural development. The focus on pulses, oilseeds, and millets reflects a shift toward nutrition security and climate resilience.
With continued support through schemes like PM-AASHA, improved logistics, and digital platforms, India’s MSP system is transitioning from a safety net for farmers to a strategic framework for food sovereignty.
From its origins as a market safety measure to its current role as a cornerstone of India’s agricultural transformation, the Minimum Support Price mechanism has become integral to the nation’s journey towards Atmanirbhar Bharat.
With record procurement, expanding farmer coverage, digital reforms, and a focus on high-value crops, the MSP framework is empowering India’s farmers, ensuring food security, and laying the foundation for a resilient and self-sufficient agricultural economy.
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