Government Approves Increased Rabi MSP for 2027-28 Marketing Season
On 30 September 2026, the Government approved increased Minimum Support Prices (MSP) for all mandated Rabi crops for the Rabi Marketing Season (RMS) 2027-28. The MSP serves as an important mechanism for providing price assurance to farmers and supporting informed decisions on agricultural planning and investment. For the 2027-28 season, an estimated ₹90,962 crore is expected to be paid to farmers for 324 lakh metric tonnes of produce.
Detailed MSP Increases and Cost Coverage
The MSP increases show varying margins over cost of production across different crops. Wheat received an increase of ₹25 per quintal to ₹2,610 per quintal, representing a 106% margin over its cost of production of ₹1,264 per quintal. Barley increased by ₹136 per quintal to ₹2,286 per quintal with a 58% margin over cost of ₹1,447 per quintal. Gram increased by ₹83 per quintal to ₹5,958 per quintal with a 59% margin over cost of ₹3,751 per quintal. Lentil (Masur) saw an increase of ₹390 per quintal to ₹7,390 per quintal with a 92% margin over cost of ₹3,854 per quintal. Rapeseed & Mustard increased by ₹413 per quintal to ₹6,613 per quintal with a 96% margin over cost of ₹3,367 per quintal. Safflower received the highest absolute increase of ₹675 per quintal to ₹7,215 per quintal with a 50% margin over cost of ₹4,810 per quintal.
Procurement Mechanism and Digital Transformation
The procurement process involves multiple agencies with cereals and coarse cereals procured through the Food Corporation of India (FCI) and designated State agencies. Procurement of pulses, oilseeds and copra is undertaken under the Price Support Scheme (PSS) of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA), which was launched in September 2018. The National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) and the National Co-operative Consumers' Federation of India Ltd. (NCCF) are key agencies responsible for procurement under this scheme.
Digital platforms have significantly enhanced procurement transparency and efficiency. NAFED's e-Samriddhi platform has registered more than 1.37 crore farmers, procured over 2.25 crore units of produce, and made 81+ lakh payouts to farmers. NCCF's e-Samyukti platform has facilitated procurement involving more than 43 lakh farmers, with over 37.45 lakh metric tonnes procured and more than ₹13,000 crore credited to farmers as of 19 October 2026. Biometric authentication through Aadhaar-enabled Point of Sale (PoS) machines or facial authentication became mandatory under PSS from the 2025–26 season to verify farmer identity and ensure benefits reach genuine beneficiaries.
Historical Procurement Growth and Financial Impact
Procurement volumes and payments have shown substantial growth over the years. Procurement of six Rabi crops increased from 2,302 lakh metric tonnes during 2004-05 to 2013-14 to 3,921 lakh metric tonnes during 2014-15 to 2025-26. Correspondingly, MSP payments rose from ₹2.65 lakh crore to ₹8.36 lakh crore over the same periods. Specifically, wheat procurement totaled 3,715 lakh metric tonnes during 2014-15 to 2025-26 compared to 2,254 lakh metric tonnes during 2004-05 to 2013-14, with payments increasing from ₹2.56 lakh crore to ₹7.31 lakh crore. In Rabi Marketing Season 2026-27, wheat procurement stood at 357.57 lakh metric tonnes with an MSP value of ₹92,432.51 crore, benefiting over 34 lakh farmers.
MSP Determination Methodology
The Commission for Agricultural Costs and Prices (CACP) recommends MSPs annually for 22 mandated agricultural crops considering several factors including cost of production, demand and supply dynamics, domestic and international prices, inter-crop price parity, terms of trade between agriculture and non-agriculture sectors, and the likely impact of price policy on the wider economy. The cost of production calculation includes paid-out expenses on hired labor, leased-in land, seeds, fertilizers, manure, irrigation, diesel and electricity for pump sets, depreciation on farm implements and buildings, interest on working capital, miscellaneous expenses, and the imputed value of family labor. The same cost-estimation formula is applied uniformly across all 22 mandated crops and across States.