Agriculture & FoodImportant2025-10-01

MSP Hike for Rabi Crops 2026-27

In News

What Happened

On October 1, 2025, the Cabinet Committee on Economic Affairs (CCEA) approved Minimum Support Price (MSP) hikes for all mandated Rabi crops for the 2026-27 marketing season. Safflower saw the highest absolute increase of Rs 600 per quintal, while wheat MSP was raised by Rs 160 to Rs 2585 per quintal. The new rates guarantee a minimum 50 percent margin over the all-India weighted average cost of production.

Why It Matters

The MSP hikes aim to ensure remunerative prices for farmers while strategically encouraging crop diversification towards pulses and oilseeds like safflower to reduce import dependence. Furthermore, adjusting the wheat MSP helps maintain national food security and buffer stocks.

Background

History & Context

The Commission for Agricultural Costs and Prices (CACP) recommends MSPs based on multiple factors, including the cost of production and domestic supply needs. Since the Union Budget 2018-19, government policy mandates that MSPs be set at least 1.5 times the all-India weighted average cost of production (A2+FL). The October 2025 announcement by the CCEA continues this framework for the 2026-27 Rabi marketing season to stabilize farm incomes.

What Changed

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Safflower MSP: BEFORE it was Rs 5940 per quintal; NOW it is Rs 6540 per quintal (an absolute increase of Rs 600).
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Wheat MSP: BEFORE it was Rs 2425 per quintal; NOW it is Rs 2585 per quintal (an absolute increase of Rs 160).
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Rapeseed and Mustard MSP: BEFORE it was Rs 5950 per quintal; NOW it is Rs 6200 per quintal (an increase of Rs 250).
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Lentil (Masur) MSP: BEFORE it was Rs 6700 per quintal; NOW it is Rs 7000 per quintal (an increase of Rs 300).

Prelims Angle

NCERT Connection

This connects to NCERT Class 9 Economics Chapter 4 (Food Security in India). The chapter explains how the government uses Minimum Support Prices to incentivize farmers, procure food grains for buffer stocks, and ensure food security. The differential hikes (higher absolute amounts for oilseeds and pulses compared to staples) illustrate modern crop diversification policies.

Practice Questions

Q1

Correct Statement(s)

Which of the following statements is/are correct regarding the Minimum Support Price (MSP) framework? 1. The current policy mandates fixing the MSP at a level of at least 1.5 times the all-India weighted average cost of production (A2+FL). 2. The final approval for MSP hikes is given by the Commission for Agricultural Costs and Prices (CACP).

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