- Why in news
- On 24 February 2026 the Cabinet Committee on Economic Affairs approved the MSP of raw jute (TD-3 grade) at Rs 5,925 per quintal for the 2026-27 marketing season.
- What it is
- Minimum Support Price is the price at which the government stands ready to buy mandated crops from farmers. The Union Government announces it on the advice of the Commission for Agricultural Costs and Prices (CACP). Raw jute is one of the mandated crops, and its MSP is backed by price support operations run by a central nodal agency.
- Return over cost
- The MSP gives a 61.8 percent return over the all-India weighted average cost of production.
- 1.5 times principle
- MSP is fixed at least 1.5 times the all-India weighted average cost of production, as announced in Budget 2018-19.
- Nodal agency
- Jute Corporation of India (JCI) continues as the central nodal agency for price support operations. The Centre fully reimburses any losses.
- Who approves MSP
- The CCEA approves MSP on the recommendation of CACP, which is a statutory-status-less advisory body under the Agriculture Ministry.
- Who recommends
- CACP recommends MSPs. The Centre decides after considering views of State Governments and Central Ministries.
- Status of CACP
- CACP is an attached office of the Ministry of Agriculture and Farmers Welfare. It has a statutory-like advisory role but no statutory backing; MSP itself has no legal guarantee.
Don’t confuse with MSP vs Fair and Remunerative Price (FRP): MSP applies to mandated crops like jute. FRP is the minimum price mills must pay for sugarcane.
Don’t confuse with JCI vs FCI/NAFED: JCI handles jute price support. FCI mainly handles wheat and rice, and NAFED handles pulses and oilseeds.
Don’t confuse with MSP vs FRP: MSP applies to 22 crops on CACP advice. FRP is the minimum price mills must pay for sugarcane.
Don’t confuse with MSP vs procurement: MSP is announced for 22 crops, but actual government procurement is concentrated in a few, mainly wheat and paddy.
Economy terms and data: 42 Prelims questions since 2013, rising in recent years; they test what a term or instrument means. In Mains, 12 news-triggered questions.
Why it matters
- Gives jute farmers an assured floor price and income support.
- Supports the jute sector, which depends on a large base of small farmers.
- Gives farmers a price floor and income security against price falls.
- Guides cropping choices and supports food security through procurement.
Problems
- Price support reaches few farmers if procurement is thin, so market prices can still fall below MSP.
- Procurement is concentrated in a few crops and States, so many farmers get no benefit.
- Cost of production definitions (A2+FL vs C2) are disputed, and there is no legal guarantee of MSP.
Way forward
- Strengthen procurement and storage so MSP is realised by farmers.
- Widen procurement and use price deficiency payments for more crops and States.
- Improve cost estimation and storage, and link MSP to crop diversification.
Put in your answer
Raw jute MSP rise since 2014-15: MSP rose from Rs 2,400 per quintal in 2014-15 to Rs 5,925 in 2026-27, about 2.5 times.
MSP paid to jute farmers: MSP payments were Rs 1,342 crore in 2014-15 to 2025-26, against Rs 441 crore in 2004-05 to 2013-14.
- 2018Mains GS3 · Q3Define MSP and explain how it can rescue farmers from the low income trap.
- 2017Mains GS3 · Q15Significance of MSP, crop insurance and food processing for small farmers.
- 2024Mains GS3 · Q14Importance of buffer stocks for price stabilisation and storage challenges.
- 2009Prelims Q9Which statements on CACP's MSP recommendations and food security mission are correct?
- 2020Prelims Q69Is MSP procurement unlimited for all crops, and is MSP set above market prices?
- 2023Prelims Q27Statements on MSP for niger seed, its kharif cultivation, and tribal oil use
- 2001Prelims Q33Name the prices government pays for food grains for PDS and buffer stocks.
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
Prelims practice · Single answer
Ours, not from a UPSC paper
Consider the following statements about the Minimum Support Price (MSP) of raw jute for the 2026-27 marketing season: 1. The MSP of raw jute (TD-3 grade) has been fixed at Rs 5,925 per quintal. 2. The MSP gives a return of 61.8 percent over the all-India weighted average cost of production. 3. The MSP was fixed at twice the all-India weighted average cost of production, as announced in Budget 2018-19. 4. The Food Corporation of India is the central nodal agency for price support operations in raw jute. 5. The Commission for Agricultural Costs and Prices announces the MSP on its own authority.
How many of the statements given above are correct?
True or false?
1 of 12
Statements the way Prelims prints them. Say first, then see the fact.
1.The Minimum Support Price of raw jute for the 2026-27 marketing season has been fixed at Rs 5,925 per quintal.
True. Raw jute (TD-3) MSP is Rs 5,925 per quintal.
2.The approved MSP of raw jute gives farmers a return of 61.8 percent over the all-India weighted average cost of production.
True. The return over cost is 61.8 percent.
3.The 2026-27 raw jute MSP was fixed at twice the all-India weighted average cost of production, as announced in Budget 2018-19.
False. The Budget 2018-19 principle is at least 1.5 times the cost of production.
4.The Food Corporation of India has been named the nodal agency for price support operations in raw jute.
False. The Jute Corporation of India is the central nodal agency.
5.Losses incurred by the nodal agency in jute price support operations are to be fully reimbursed by the Central Government.
True. The Centre fully reimburses losses, if any.
6.The raw jute MSP for 2026-27 is Rs 275 per quintal higher than the previous marketing season.
True. The increase over 2025-26 is Rs 275 per quintal.
7.MSP for mandated crops is announced by the Commission for Agricultural Costs and Prices on its own authority.
False. The Union Government (CCEA) announces MSP on CACP's recommendation; CACP only advises.
8.MSP is announced for 22 mandated crops, including two commercial crops.
True. 22 crops: 14 Kharif, 6 Rabi, 2 commercial (jute, copra).
9.Sugarcane is among the 22 mandated crops for which MSP is fixed by the Centre.
False. Sugarcane is not in the list; it has a Fair and Remunerative Price (FRP).
10.Rabi crops among the mandated crops include wheat, barley, gram, masur, rapeseed and mustard, and safflower.
True. These are the 6 Rabi crops.
11.CACP fixes MSPs on its own and the Union Government has no role in the final decision.
False. CACP only recommends; the Government decides after consulting States and Ministries.
12.MSP carries statutory legal backing under which private traders must pay at least MSP.
False. MSP has no statutory backing; it is an administrative decision.
Written by us from the release, not by UPSC; checked by a second model.
Mains practice
15 marks · 250 words
The Minister of State for Agriculture told the Lok Sabha in February 2026 that MSPs are fixed yearly for 22 crops on the advice of the CACP, at a minimum return of 50 percent over the all-India weighted average cost of production since 2018-19. Discuss the features of the MSP system and critically examine its challenges and the way forward.
Worth revising until Prelims 2027: most news questions come within two years of the event.