The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Shri Narendra Modi, has approved the Minimum Support Prices (MSP) for all mandated Rabi Crops for Marketing Season 2027-28. This decision aims to ensure remunerative prices to growers for their produce and incentivize crop diversification.
MSP Increases and Cost Coverage
The government announced varying increases across different crops, with safflower receiving the highest absolute increase of ₹675 per quintal (from ₹6,540 to ₹7,215), followed by rapeseed & mustard with ₹413 per quintal increase (from ₹6,200 to ₹6,613). Lentil (masur) increased by ₹390 per quintal (from ₹7,000 to ₹7,390), barley by ₹136 per quintal (from ₹2,150 to ₹2,286), gram by ₹83 per quintal (from ₹5,875 to ₹5,958), and wheat by ₹25 per quintal (from ₹2,585 to ₹2,610).
The MSPs provide significant margins over the comprehensive cost of production, which includes all paid-out costs such as hired human labor, bullock/machine labor, land rent, seeds, fertilizers, manures, irrigation charges, depreciation on implements and farm buildings, interest on working capital, diesel/electricity for pump sets, miscellaneous expenses, and imputed value of family labor. The margin over cost ranges from 50% for safflower to 106% for wheat, with rapeseed & mustard at 96%, lentil at 92%, gram at 59%, and barley at 58%.
Historical Context and Procurement Trends
This MSP increase continues the Union Budget 2018-19 commitment to fix MSP at least 1.5 times the All-India weighted average cost of production. The government has been promoting cultivation of pulses and oilseeds over cereals by offering higher MSP for these crops.
Procurement data shows substantial growth: wheat procurement during 2014-15 to 2025-26 increased to 3715 lakh metric tonnes (LMT) compared to 2254 LMT during 2004-05 to 2013-14. Total procurement of all six Rabi crops reached 3921 LMT during 2014-15 to 2025-26 versus 2302 LMT in the previous decade.
Financial transfers to farmers have significantly increased, with MSP payments to wheat growers rising to ₹7.31 lakh crore during 2014-15 to 2025-26 from ₹2.56 lakh crore during 2004-05 to 2013-14. Total MSP payments for all six Rabi crops reached ₹8.36 lakh crore in the recent period compared to ₹2.65 lakh crore in the previous decade.