The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, on Wednesday approved an increase in the Minimum Support Prices (MSPs) for all mandated Rabi crops for the 2027-28 Marketing Season, with the government saying the move will ensure remunerative prices for farmers and encourage crop diversification.
The highest absolute increase in MSP has been approved for safflower at ₹675 per quintal, followed by rapeseed and mustard at ₹413 per quintal and lentil (masur) at ₹390 per quintal.
The MSP for wheat has been increased by ₹25 per quintal to ₹2,610, while the MSP for barley has been raised by ₹136 to ₹2,286 per quintal. The MSP for gram has been increased by ₹83 to ₹5,958 per quintal. The MSP for lentil has been fixed at ₹7,390 per quintal, while rapeseed and mustard will have an MSP of ₹6,613 per quintal. The MSP for safflower has been raised to ₹7,215 per quintal.
The cost of production for wheat has been estimated at ₹1,264 per quintal, giving an expected margin of 106 per cent over cost. For barley, the cost of production is ₹1,447, with a 58 per cent margin. Gram has a cost of production of ₹3,751 and a 59 per cent margin, while lentil has a cost of ₹3,854 and a 92 per cent margin.
For rapeseed and mustard, the cost of production has been estimated at ₹3,367 per quintal, resulting in an expected margin of 96 per cent. Safflower has a cost of production of ₹4,810 and an expected margin of 50 per cent.
The revised MSPs are in line with the Union Budget 2018-19 announcement to fix MSPs at a level of at least 1.5 times the All-India weighted average Cost of Production.
The government said the expected margin over the All-India weighted average cost of production is 106 per cent for wheat, followed by 96 per cent for rapeseed and mustard, 92 per cent for lentil, 59 per cent for gram, 58 per cent for barley and 50 per cent for safflower.
The government said the higher MSPs for Rabi crops are aimed at ensuring remunerative returns to farmers while also incentivising crop diversification. In recent years, it has been promoting the cultivation of crops other than cereals, particularly pulses and oilseeds, by offering higher MSPs for these crops.
Higher procurement of Rabi crops
The government highlighted a significant increase in procurement of wheat and other Rabi crops over the past decade.
Wheat procurement during 2014-15 to 2025-26 increased to 3,715 lakh metric tonnes (LMT), compared with 2,254 LMT during 2004-05 to 2013-14.
The combined procurement of six Rabi crops during 2014-15 to 2025-26 stood at 3,921 LMT, compared with 2,302 LMT during 2004-05 to 2013-14.
The MSP amount paid to wheat-growing farmers during 2014-15 to 2025-26 increased to ₹7.31 lakh crore, compared with ₹2.56 lakh crore during 2004-05 to 2013-14.
For farmers growing the six Rabi crops, the MSP amount paid during 2014-15 to 2025-26 rose to ₹8.36 lakh crore, compared with ₹2.65 lakh crore during 2004-05 to 2013-14.
The cost of production used for determining the MSP includes paid-out costs such as expenditure on hired human labour, bullock and machine labour, rent paid for leased-in land, seeds, fertilisers, manures, irrigation charges, depreciation on implements and farm buildings, interest on working capital, diesel and electricity used for operating pump sets, miscellaneous expenses and the imputed value of family labour.