Cabinet approves hike in MSP for 14 kharif crops for 2025-26; outlay at ₹2.07 lakh crore

The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved an increase in the Minimum Support Prices (MSP) for 14 Kharif crops for the 2025-26 marketing season, with a total outlay of ₹2.07 lakh crore.

The hike in MSPs is in line with the government’s policy, first announced in the Union Budget of 2018-19, of fixing the MSP at least 1.5 times the all-India weighted average cost of production.

"“In past 10-11 years, there is major hike in Kharif crops MSP...PM Narendra Modi has focused that farmers must get at least 50 per cent margin on their cost," Union minister Ashwini Vaishnaw told a Cabinet briefing.

"So, we have taken care that on all the crops the farmers get their base cost plus at least 50% margin on that cost."

The Commission for Agricultural Costs and Prices (CACP), which recommends MSPs, considered factors such as cost of production, demand-supply dynamics, domestic and international prices, inter-crop parity, and the impact on the economy while making its suggestions, according to a presentation by Vaishnaw.

The highest absolute increase in MSP over the previous year has been proposed for nigerseed (₹820 per quintal), followed by ragi (₹596), cotton (₹589), and sesamum (₹579). The expected margin for farmers over their cost of production is estimated to be the highest in bajra (63%), followed by maize (59%), tur (59%), and urad (53%).

For all other crops, the margin to farmers over their cost of production is estimated to be at 50%.

The government said it has been actively promoting the cultivation of pulses, oilseeds, and Nutri-cereals, or "Shree Anna", by offering higher MSPs for these crops in recent years.

Between 2014-15 and 2024-25, the procurement of paddy rose to 7,608 lakh metric tonnes (LMT), as against 4,590 LMT during 2004-05 to 2013-14. The procurement of all 14 Kharif crops stood at 7,871 LMT in the past decade, compared to 4,679 LMT in the previous one.

The MSP amount paid to paddy-growing farmers during 2014-15 to 2024-25 was ₹14.16 lakh crore, a sharp increase from ₹4.44 lakh crore disbursed between 2004-05 and 2013-14. The total MSP disbursal for all 14 Kharif crops during the same period was ₹16.35 lakh crore, up from ₹4.75 lakh crore in the previous decade.