By addressing implementation challenges and improving the scope and reach of MSP, the Modi government can create a more equitable system that aligns with the vision of Viksit Bharat.
India’s agricultural sector forms the backbone of its economy, providing livelihoods to millions and ensuring food security for a vast population. At the heart of agricultural policy is the Minimum Support Price (MSP) system, which guarantees farmers a fair price for their produce, insulating them from market fluctuations. This article delves into the comprehensive scope of MSP, the crops it covers, and its role in fostering a progressive agricultural ecosystem.
What is MSP?
MSP is the price at which the government procures crops from farmers, ensuring they are not forced to sell below their cost of production during periods of low market prices. The MSP is announced for 22 mandated crops and is determined based on recommendations from the Commission for Agricultural Costs and Prices (CACP), along with input from state governments and relevant central ministries.
Crops Covered Under MSP
The MSP system encompasses a wide variety of crops, grouped into Kharif, Rabi, and other categories:
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Kharif Crops
- Cereals: Paddy (Common), Jowar, Bajra, Maize, Ragi
- Pulses: Tur (Arhar), Moong, Urad
- Oilseeds: Groundnut, Sunflower, Soybean (Yellow), Sesamum, Nigerseed
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Rabi Crops
- Cereals: Wheat, Barley
- Pulses: Gram, Masur (Lentil)
- Oilseeds: Rapeseed & Mustard, Safflower
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Commercial Crops
- Cotton (Medium Staple)
- Jute
- Copra (Milling)
Recent MSP Trends: Growth Analysis (2020-2025)
The government has consistently increased MSP over the years to align with rising production costs. Below are the key insights from the last five years:
- Paddy (Common): MSP increased from ₹1,868 per quintal in 2020-21 to ₹2,300 in 2024-25, a rise of ₹432.
- Jowar: MSP rose by ₹751, from ₹2,620 to ₹3,371 during the same period.
- Ragi: Saw a significant increase of ₹995, from ₹3,295 to ₹4,290.
- Moong: MSP climbed by ₹1,486, from ₹7,196 to ₹8,682.
- Soybean (Yellow): The MSP increased by ₹1,012, from ₹3,880 to ₹4,892.
- Cotton (Medium Staple): A notable rise of ₹1,606, from ₹5,515 to ₹7,121.
The government has also ensured significant increases for Rabi crops:
- Wheat: MSP grew by ₹450, from ₹1,975 in 2021-22 to ₹2,425 in 2025-26.
- Rapeseed & Mustard: A rise of ₹1,300, from ₹4,650 to ₹5,950.
- Masur (Lentil): Witnessed a substantial hike of ₹1,600, from ₹5,100 to ₹6,700.
Procurement Mechanisms Under MSP
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Cereals and Coarse Grains
The Food Corporation of India (FCI) and designated state agencies procure cereals and coarse grains to stabilize prices and maintain buffer stocks. The procurement estimates are finalized in consultation with state governments based on production and marketable surplus. -
Pulses, Oilseeds, and Copra
Procurement is conducted under the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) when market prices fall below MSP. Agencies like NAFED and NCCF handle procurement, restricted to 25% of All India production. -
Cotton and Jute
Cotton is procured by the Cotton Corporation of India (CCI), while jute procurement is managed by the Jute Corporation of India (JCI). Unlike other crops, there is no maximum quantity limit for cotton and jute procurement.
Key Challenges in MSP Implementation
Despite its numerous benefits, MSP faces several implementation challenges:
- Limited Awareness: Many farmers, especially smallholders, remain unaware of MSP or lack access to procurement centers.
- Regional Disparities: Procurement is concentrated in select states, disadvantaging farmers in non-procurement areas.
- Infrastructure Gaps: Lack of adequate storage and transport facilities often leads to inefficiencies in procurement.
Strengthening MSP
To maximize the benefits of MSP, the government should focus on:
- Expanding Awareness Campaigns: Ensuring farmers across all regions are informed about MSP and its processes.
- Strengthening Infrastructure: Building more storage units and procurement centers in underserved areas.
- Enhancing Technology Integration: Leveraging digital tools for transparent procurement, real-time price updates, and farmer registration.
- Boosting Private Sector Participation: Encouraging private players to support procurement and storage under regulatory guidelines.
MSP remains a cornerstone of India’s agricultural policy, ensuring financial security for farmers and fostering sustainable agricultural growth. By addressing implementation challenges and improving the scope and reach of MSP, the government can create a more equitable system that aligns with the vision of Viksit Bharat. A robust MSP framework not only uplifts farmers but also strengthens India’s journey towards self-reliance and prosperity in agriculture.
