Centre raises MSP for 14 kharif crops, boosts support for pulses and oilseeds

The Cabinet Committee on Economic Affairs (CCEA) approved an increase in Minimum Support Prices (MSPs) for all 14 mandated kharif crops for the 2026-27 marke...

What Happened

The Cabinet Committee on Economic Affairs (CCEA) approved an increase in Minimum Support Prices (MSPs) for all 14 mandated kharif crops for the 2026-27 marketing season.
Paddy (common grade) MSP was raised by ₹72 per quintal to ₹2,441; Grade A paddy was set at ₹2,461 per quintal.
Moong received the highest percentage margin over cost of production at 61%, followed by bajra and maize at 56% each, and tur/arhar at 54%; the government stated margins across all 14 crops are at least 50% above cost.
Pulses and oilseeds received significant absolute hikes: sunflower seed rose by ₹622/quintal to ₹8,343; cotton (medium staple) was raised by ₹557/quintal to ₹8,267; nigerseed rose by ₹515/quintal to ₹10,052; sesamum rose by ₹500/quintal to ₹10,346.
The total projected government outlay on MSP procurement for kharif 2026-27 is estimated at approximately ₹2.60 lakh crore.

Static Topic Bridges

Minimum Support Price (MSP) — Mechanism and Legal Status

MSP is a price floor set by the Union Government at which designated agencies procure crops from farmers, shielding them from market price crashes. It has no statutory backing — MSP is an executive policy instrument, not a law — meaning farmers have no legal right to demand procurement at the announced price. The absence of a legal guarantee for MSP has been a central demand of farm agitations and has been examined by the Supreme Court, which sought the Centre's response on petitions requesting that the C2+50% formula be legislated.

MSP is announced for 23 crops (7 cereals, 5 pulses, 7 oilseeds, 4 commercial crops) each year — 14 kharif + 6 rabi + 3 others.
The CCEA (chaired by the Prime Minister) formally approves the MSP; it is not binding on private buyers.
Currently there is no statutory or constitutional provision mandating MSP payment by any buyer.

Connection to this news: The CCEA approved kharif MSPs for 2026-27 following the established executive process, with the government reiterating its commitment to the 1.5× cost formula from the Union Budget 2018-19.

Commission for Agricultural Costs and Prices (CACP) — Role and Recommendation Process

The CACP is an attached office of the Ministry of Agriculture and Farmers' Welfare that recommends MSPs for notified kharif and rabi crops. It is a statutory advisory body — its recommendations are not binding on the government. The CACP prepares Price Policy Reports annually, consulting state governments, national organisations, and relevant ministries before submitting its advice.

Composition: Five members — a Chairman, a Member Secretary (official), one Official Member, and two Non-Official Members (farmer representatives).
CACP considers three cost variants: A2 (actual paid-out costs: seeds, fertilisers, pesticides, hired labour, irrigation); A2+FL (A2 plus imputed value of family labour); and C2 (comprehensive cost = A2+FL plus imputed rental value of owned land plus interest on fixed capital).
The Union Budget 2018-19 committed to fixing MSP at "at least 1.5 times the all-India weighted average cost of production" — this refers to A2+FL cost, not C2.
The MS Swaminathan Commission (2006) had recommended MSP = C2 + 50% of C2, which would yield higher prices; this formula has not been fully adopted.

Connection to this news: The CACP recommended the kharif 2026-27 MSPs; the CCEA approved them. The stated margins (50–61% above cost) are calculated over A2+FL cost, not C2 — a distinction critical to understanding the ongoing legal guarantee debate.

Kharif vs. Rabi Cropping Seasons

Indian agriculture operates on two primary cropping calendars. Kharif crops are sown at the onset of the south-west monsoon (June–July) and harvested in September–October; they include paddy, bajra, maize, jowar, ragi, tur, moong, urad, groundnut, soybean, sunflower, sesamum, nigerseed, and cotton. Rabi crops are sown after the monsoon retreats (October–November) and harvested in March–April.

Paddy is the largest kharif crop by area and procurement volume; it forms the base of the Public Distribution System (PDS) rice supply.
The MSP for paddy directly affects food inflation and the fiscal cost of food subsidy (via the Food Corporation of India).
Pulses (tur, moong, urad) and oilseeds (groundnut, soybean, sunflower, sesamum, nigerseed) receive elevated MSP support to incentivise domestic production and reduce import dependence.

Connection to this news: The disproportionate margin increases for moong (61%), bajra (56%), and tur (54%) reflect a deliberate policy choice to boost production of protein-rich pulses and coarse cereals, addressing India's structural deficit in pulse production and import reliance.

Price Support and Procurement Architecture

MSP alone does not guarantee farmer income unless supported by active procurement. The Food Corporation of India (FCI) and State agencies procure paddy and wheat at MSP for the Central pool. For pulses and oilseeds, the National Cooperative Exports Limited (NCEL) and state agencies operate Price Support Scheme (PSS) procurement, which is demand-triggered and limited in scale.

FCI is a statutory body set up under the Food Corporations Act, 1964.
Price Support Scheme (PSS) for pulses and oilseeds is operationalised by NAFED (National Agricultural Cooperative Marketing Federation) and NCEL.
Market Intervention Scheme (MIS) is a related but separate instrument for perishables not covered under MSP.

Connection to this news: The higher MSP for pulses and oilseeds is meaningful only if accompanied by robust PSS procurement; historically, only a small share of pulse production has been procured under MSP, leaving most farmers exposed to open market prices.

Key Facts & Data

Paddy MSP 2026-27: ₹2,441/quintal (common), ₹2,461/quintal (Grade A) — up ₹72 from 2025-26.
Moong MSP 2026-27: ₹8,780/quintal — highest margin at 61% over A2+FL cost.
Bajra MSP: ₹2,900/quintal (56% margin); Maize: ₹2,410/quintal (56% margin).
Tur/Arhar MSP: ₹8,450/quintal (54% margin); Urad: ₹8,200/quintal.
Sunflower seed: ₹8,343/quintal (highest absolute hike of ₹622/quintal).
Sesamum: ₹10,346/quintal; Nigerseed: ₹10,052/quintal.
Cotton (medium staple): ₹8,267/quintal; Cotton (long staple): ₹8,667/quintal.
All 14 kharif crops show at least 50% margin over A2+FL production cost.
Total estimated kharif MSP procurement outlay: ~₹2.60 lakh crore.
CACP was established in 1965; it is an attached office under the Ministry of Agriculture and Farmers' Welfare.
MS Swaminathan Commission submitted its report in 2006, recommending C2+50% formula for MSP.