MSP hike for Kharif crops: Cabinet raises support prices for 14 crops for marketing season 2026-27

The Cabinet Committee on Economic Affairs (CCEA) approved a hike in Minimum Support Prices (MSP) for 14 Kharif crops for Marketing Season 2026-27, continuing...

What Happened

The Cabinet Committee on Economic Affairs (CCEA) approved a hike in Minimum Support Prices (MSP) for 14 Kharif crops for Marketing Season 2026-27, continuing the government's commitment to ensure remunerative returns to farmers.
The highest absolute increase was approved for Sunflower Seed (Rs 622 per quintal), followed by Cotton (Rs 557 per quintal), Nigerseed (Rs 515 per quintal), and Sesamum (Rs 500 per quintal).
Key crop-wise MSPs approved: Paddy (Common) at Rs 2,441 per quintal; Paddy (Grade A) at Rs 2,461 per quintal; Bajra at Rs 2,900 per quintal; Maize at Rs 2,410 per quintal; Tur/Arhar at Rs 8,450 per quintal; Moong at Rs 8,780 per quintal; Urad at Rs 8,200 per quintal; Groundnut at Rs 7,517 per quintal; Jowar (Hybrid) at Rs 4,023 per quintal.
The expected margin over cost of production is highest for Moong (61%), followed by Bajra (56%), Maize (56%), and Tur/Arhar (54%).
The estimated payout to farmers for the Kharif season is projected at Rs 2,60,000 crore.

Static Topic Bridges

Commission for Agricultural Costs and Prices (CACP)

The CACP is an attached office under the Ministry of Agriculture and Farmers' Welfare, set up in 1965 and reconstituted in March 1985 with a broader mandate. It recommends MSPs for 24 notified crops — both Kharif and Rabi — to the Cabinet Committee on Economic Affairs (CCEA). The CACP considers three cost concepts: A2 (actual paid-out costs), A2+FL (paid-out costs plus imputed family labour), and C2 (comprehensive cost including imputed rent and interest on owned land and capital). CACP's recommendations are advisory and not legally binding on the government; it is not a statutory body.

CACP recommends MSPs; final approval rests with CCEA (not Cabinet as a whole)
Covers 14 Kharif crops, 6 Rabi crops, and sugarcane (Fair and Remunerative Price)
Composition: Chairman, Member Secretary, one official member, two non-official members
Currently recommends MSPs for 24 commodities

Connection to this news: The MSPs announced for 2026-27 are based on CACP recommendations, with the government targeting at least 50% return over cost of production (A2+FL basis) — a commitment made in Union Budget 2018-19.

MSP as a Price Support Mechanism

MSP is the floor price declared by the government at which it commits to purchase crops from farmers, intended to provide income security and insulate agriculture from price volatility. It does not constitute a legal guarantee — no law mandates private buyers to purchase at MSP. The MSP system covers Kharif, Rabi, and commercial crops, but actual procurement primarily happens for paddy and wheat through the Food Corporation of India (FCI). For oilseeds and pulses, the Price Support Scheme (PSS) under NAFED is the procurement vehicle.

MSP is announced pre-sowing to guide planting decisions
Procurement above MSP is done through FCI (food grains) and NAFED (pulses, oilseeds)
The Swaminathan Commission (National Commission on Farmers, 2006) had recommended MSP at C2+50% — a demand that remains contested
The 2018-19 Budget announced MSP at 1.5 times A2+FL, not C2

Connection to this news: The MSP hike for Kharif 2026-27 is set at over 50% above A2+FL cost, fulfilling the Budget 2018-19 commitment, though farm groups continue to demand the C2+50% formula recommended by the Swaminathan Commission.

Kharif Cropping Season

Kharif crops are summer crops sown at the beginning of the monsoon season (June-July) and harvested in September-October. They are rain-dependent and sensitive to Southwest Monsoon performance. Major Kharif crops include paddy, jowar, bajra, maize, cotton, groundnut, tur, moong, urad, soybean, sunflower, sesamum, and nigerseed — all 14 of which have MSP coverage.

Kharif sowing begins with Southwest Monsoon onset (usually June)
Paddy is the dominant Kharif food grain; cotton is the dominant cash crop
Pulses (tur, moong, urad) are critical for protein nutrition and import substitution
Oilseeds (groundnut, sunflower, sesamum) support edible oil self-sufficiency goals

Connection to this news: The relatively larger MSP hikes for oilseeds and pulses reflect the government's ongoing strategy to boost domestic production in these import-dependent categories, reducing reliance on edible oil imports (palm oil from Malaysia/Indonesia) and pulse imports.

Key Facts & Data

CCEA approved MSP hike for 14 Kharif crops for Marketing Season 2026-27
Highest absolute increase: Sunflower Seed — Rs 622/quintal; Cotton — Rs 557/quintal
Paddy (Common) MSP: Rs 2,441/quintal; Paddy (Grade A): Rs 2,461/quintal
Tur/Arhar MSP: Rs 8,450/quintal; Moong: Rs 8,780/quintal; Urad: Rs 8,200/quintal
Highest return over cost: Moong (61%), Bajra (56%), Maize (56%)
MSP set at minimum 1.5 times A2+FL cost (Budget 2018-19 commitment)
CACP recommends MSPs; CCEA approves; CACP covers 24 commodities total
Estimated farmer payout for Kharif season: Rs 2,60,000 crore
CACP established: 1965; reconstituted with broader mandate: March 1985
MSP is advisory for private trade — no statutory obligation on private buyers to procure at MSP