- Why in news
- On 13 May 2026, the CCEA chaired by the Prime Minister approved higher MSPs for 14 Kharif crops for Marketing Season 2026-27.
- What it is
- MSP is a price announced by the Centre at which government agencies are ready to buy specified crops from farmers. It is set on the recommendation of the Commission for Agricultural Costs and Prices (CACP). Since Budget 2018-19, the aim is an MSP of at least 1.5 times the all-India weighted average cost of production.
- Approving body
- The CCEA, chaired by the Prime Minister, approved MSP for 14 Kharif crops for Marketing Season 2026-27.
- 1.5 times formula
- The increase follows the Union Budget 2018-19 announcement of fixing MSP at least 1.5 times the all-India weighted average cost of production.
- Highest increases
- Sunflower Seed has the largest absolute rise (₹622 per quintal), then Cotton (₹557), Nigerseed (₹515) and Sesamum (₹500).
- Paddy procurement
- Paddy procurement was 8418 LMT in 2014-15 to 2025-26, against 4590 LMT in 2004-05 to 2013-14.
- Recommending body
- MSP is recommended by the CACP, a statutory-status-less expert body under the Agriculture Ministry; the decision is taken by the CCEA.
Don’t confuse with MSP vs FRP: MSP applies to notified crops; Fair and Remunerative Price (FRP) is the minimum price mills pay for sugarcane.
Don’t confuse with A2+FL vs C2 cost: A2+FL covers paid-out costs plus family labour; C2 adds rent and interest on owned land and capital.
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 farmers price assurance and income support.
- Higher MSP for pulses, oilseeds and Shree Anna promotes crop diversification.
Problems
- Procurement is concentrated in paddy and wheat and in a few states, so benefits are uneven.
- Rising MSP can raise food inflation and fiscal cost, and distort cropping toward water-intensive paddy.
Way forward
- Widen procurement for pulses and oilseeds and expand price deficiency payment options.
- Improve markets and storage so more farmers realise prices near MSP.
Put in your answer
MSP payouts: MSP paid for 14 Kharif crops was Rs 18.99 lakh crore in 2014-15 to 2025-26, against Rs 4.75 lakh crore in 2004-05 to 2013-14.
Diversification push: The government offers a higher MSP for pulses, oilseeds and Nutri-cereals/Shree Anna to promote their cultivation.
- 2018Mains GS3 · Q3Define MSP and explain how it rescues farmers from low income trap
- 2017Mains GS3 · Q15Significance of MSP, crop insurance, food processing for small farmers
- 2026Mains GS3 · Q14Discuss government subsidies and supports to agriculture, and related WTO AoA issues
- 2023Prelims Q27Which statements on government MSP for niger seed are correct
- 2009Prelims Q9Does CACP recommend MSPs for 32 crops; and National Food Security Mission launch
- 2020Prelims Q69Is MSP procurement unlimited for all cereals, pulses, oilseeds in every state
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
Prelims practice · Statement I and II
Ours, not from a UPSC paper
Consider the following two statements about the Minimum Support Prices (MSP) for Kharif crops for Marketing Season 2026-27:
- Statement-I: The highest absolute increase in MSP over the previous year is for Sunflower Seed, at ₹622 per quintal.
- Statement-II: The expected margin over the cost of production is highest for Moong, among the Kharif crops.
Which one of the following is correct in respect of the above statements?
True or false?
1 of 7
Statements the way Prelims prints them. Say first, then see the fact.
1.The MSP for Kharif crops for Marketing Season 2026-27 was approved by the Cabinet Committee on Economic Affairs.
True. The CCEA approved it.
2.The highest absolute increase in MSP over the previous year is for Cotton.
False. Sunflower Seed has the highest (₹622 per quintal); Cotton is second (₹557).
3.The increase is in line with the Union Budget 2018-19 announcement of fixing MSP at least 1.5 times the all-India weighted average cost of production.
True. Budget 2018-19 set the 1.5 times norm.
4.The expected margin over cost is highest for Tur/Arhar among Kharif crops in 2026-27.
False. Moong has the highest margin (61%); Tur/Arhar is at 54%.
5.The cost of production considered for MSP includes the imputed value of family labour.
True. The cost includes imputed family labour value.
6.Paddy procurement during 2014-15 to 2025-26 was 8418 LMT, against 4590 LMT in the preceding decade.
True. 8418 LMT versus 4590 LMT.
7.MSP for Kharif crops is recommended by the Reserve Bank of India and has statutory backing under an Act of Parliament.
False. The CACP recommends MSP; MSP has no statutory backing.
Written by us from the release, not by UPSC; checked by a second model.
Mains practice
15 marks · 250 words
Minimum Support Price is meant to ensure remunerative prices to farmers, yet it covers few crops and few farmers effectively. Discuss the provisions of the MSP system, including the 1.5 times cost norm, and critically examine the challenges in its implementation and the way forward.
Worth revising until Prelims 2027: most news questions come within two years of the event.