Cabinet Approves Higher MSPs for 14 Kharif Crops, Boosting Farmer Incomes and Strengthening Food Security

In a major move aimed at strengthening farm incomes and encouraging crop diversification, the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved increased Minimum Support Prices (MSPs) for 14 Kharif crops for the 2026–27 marketing season.

The revised MSPs are designed to ensure remunerative prices for farmers while supporting India’s broader goals of food security, self-reliance in edible oils and pulses, and sustainable agricultural growth.

The government said the MSP revisions remain aligned with the Union Budget 2018–19 commitment of fixing MSPs at a minimum of 1.5 times the all-India weighted average cost of production.

Sunflower Seed, Cotton and Oilseeds Receive Sharpest MSP Hikes

Among all crops, sunflower seed received the highest absolute increase in MSP over the previous year, with a rise of ₹622 per quintal.

Other major increases include:

• Cotton: ₹557 per quintal

• Nigerseed: ₹515 per quintal

• Sesamum: ₹500 per quintal

The government’s focus on oilseeds and pulses reflects growing efforts to reduce India’s dependence on edible oil and pulse imports while encouraging farmers to diversify away from water-intensive cereal cultivation.

Agricultural economists say higher MSPs for oilseeds and pulses are intended to improve profitability and incentivize acreage expansion in these sectors.

New MSP Rates for Major Kharif Crops

Cereals

Pulses

Oilseeds

Commercial Crops

Farmers to Receive Margins of Up to 61%

The government stated that the revised MSPs are expected to provide substantial profit margins over production costs for farmers.

Estimated Margins Over Cost of Production:

• Moong: 61%

• Bajra: 56%

• Maize: 56%

• Tur/Arhar: 54%

For the remaining crops, margins are estimated at approximately 50% above production cost.

Officials noted that the cost calculations include:

• Labour expenses

• Machine and bullock labour

• Land rent

• Seeds and fertilisers

• Irrigation charges

• Fuel and electricity

• Depreciation costs

• Family labour valuation

• Miscellaneous farming expenses

Agricultural policy experts say maintaining margins above production cost is critical for ensuring rural income stability amid rising input costs and climate-related risks.

Government Pushes Crop Diversification

The MSP increases continue the government’s broader strategy of encouraging cultivation of crops beyond traditional cereals.

Officials highlighted that higher MSP incentives are increasingly being offered for:

• Pulses

• Oilseeds

• Nutri-cereals (Shree Anna)

• Climate-resilient crops

This policy direction aims to address multiple national priorities simultaneously, including:

• Nutritional security

• Reduced edible oil imports

• Soil health improvement

• Water conservation

• Climate adaptation

• Farmer income diversification

Experts say encouraging cultivation of millets and pulses is particularly important given growing concerns around groundwater depletion linked to paddy cultivation in several states.

Massive Increase in Procurement Since 2014

The government also highlighted significant increases in procurement volumes and MSP payments over the past decade.

Paddy Procurement

• 2014-15 to 2025-26: 8,418 lakh metric tonnes (LMT)

• 2004-05 to 2013-14: 4,590 LMT

Procurement of 14 Kharif Crops

• 2014-15 to 2025-26: 8,746 LMT

• 2004-05 to 2013-14: 4,679 LMT

The data reflects a substantial expansion in procurement operations and MSP coverage.

MSP Payments to Farmers Nearly Quadruple

The government said financial support extended to farmers through MSP procurement has risen sharply over the last decade.

MSP Payments to Paddy Farmers

• 2014-15 to 2025-26: ₹16.08 lakh crore

• 2004-05 to 2013-14: ₹4.44 lakh crore

MSP Payments for 14 Kharif Crops

• 2014-15 to 2025-26: ₹18.99 lakh crore

• 2004-05 to 2013-14: ₹4.75 lakh crore

Officials said the increase reflects stronger procurement systems and expanded government support for agricultural producers.

MSP System Remains Central to Agricultural Policy

The MSP mechanism continues to play a crucial role in India’s agricultural economy by providing price assurance to farmers and protecting them from sharp market fluctuations.

The government fixes MSPs for key crops based on recommendations from the Commission for Agricultural Costs and Prices (CACP), taking into account:

• Cost of cultivation

• Market trends

• Demand-supply conditions

• Inter-crop price parity

• Impact on consumers

• National food security requirements

Agricultural experts note that MSP remains particularly important for small and marginal farmers who are vulnerable to volatile commodity markets and rising production costs.

Agriculture Remains Critical to India’s Economy

Despite rapid industrialisation and growth in services, agriculture continues to support the livelihoods of a large share of India’s population.

Government officials say higher MSPs are intended not only to support farm incomes, but also to strengthen:

• Rural demand

• Agricultural investment

• Food production stability

• Nutritional security

• Domestic self-reliance

As India faces growing climate pressures and rising food demand, policymakers are increasingly focusing on balancing farmer welfare with long-term sustainability and food security objectives.

The latest MSP revisions are expected to influence sowing decisions ahead of the upcoming Kharif season while reinforcing the government’s broader agenda of inclusive rural growth and agricultural resilience.