- Why in news
- On 12 April 2026 the Finance Ministry clarified that its 9 January 2026 letter asking States to align bonus policy over MSP to favour pulses, oilseeds and millets was an advisory, not a directive. This followed a reference to the letter by the Tamil Nadu Chief Minister.
- What it is
- A State bonus is an extra payment a State government gives farmers over the Centre's announced Minimum Support Price (MSP). Bonuses on wheat and paddy can push farmers further into these crops. The Centre wants States to tilt support towards pulses, oilseeds and millets to cut imports and ease water and fertiliser stress.
- Concern about bonuses
- Bonus over MSP on wheat and paddy encourages their cultivation, reducing area under pulses, oilseeds and millets and raising import dependence.
- Edible oil imports
- Economic Survey 2025-26 says import dependence for edible oil fell from 63.2% (2015-16) to 56.25% (2023-24).
- Missions cited
- Centre cites the Mission for Aatmanirbharta in Pulses, National Mission on Edible Oils–Oilseeds and National Mission on Edible Oils–Oil Palm.
- Who announces MSP
- MSP is announced by the Central Government on the recommendation of the Commission for Agricultural Costs and Prices (CACP).
Don’t confuse with MSP vs State bonus: MSP is set by the Centre; a bonus is an extra amount added by a State on its own.
Don’t confuse with Advisory vs directive: An advisory is a non-binding suggestion; a directive must be followed.
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
- Aligning State bonuses with national priorities can reduce wheat-paddy monoculture and save groundwater.
- Higher domestic pulses and oilseed output lowers import dependence and price volatility.
Problems
- States have their own fiscal and political choices on farm support, raising Centre-State friction.
- Assured procurement of wheat and paddy makes shifting to other crops risky for farmers.
Way forward
- Pair diversification advice with assured procurement and remunerative MSP for pulses, oilseeds and millets.
- Build consensus through consultation, e.g. in NITI Aayog or Inter-State forums, instead of letters alone.
Put in your answer
Oilseed gains: From 2014-15 to 2024-25, oilseed area rose over 18%, production nearly 55% and productivity about 31%.
Dhan-Dhaanya Krishi Yojana: Scheme targets 100 low-performing agri-districts, with crop diversification as one aim.
- 2018Mains GS3 · Q3What is MSP, and how can it rescue farmers from the low income trap?
- 2021Mains GS3 · Q14What are the challenges before crop diversification, and how can emerging technologies help?
- 2018Mains GS3 · Q14How has emphasis on certain crops changed cropping patterns, especially millets production?
- 2020Prelims Q90Which listed practices are eco-friendly agriculture, including crop diversification and legume intensification?
- 2019Prelims Q79What economic cost of food grains to FCI includes MSP and bonus paid to farmers?
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
No practice question for this one; the card may still help an answer. Why: Lasting agriculture-policy debate on state bonuses skewing crops to wheat and paddy. Advisory only, so no firm provisions for a question; MSP is already on file.
Worth revising until Prelims 2027: most news questions come within two years of the event.