MSP Boosts Farmer Income, Drives Crop Self-Sufficiency

The Minimum Support Price (MSP) remains a vital tool for Indian farmers amid fluctuating weather and market conditions. Annually revised MSPs assure farmers a fixed price for their crops. This policy protects farmers from distress sales and encourages investment in quality inputs. Recent increases in MSP for 2025-26 and 2026-27 marketing seasons reflect the government’s commitment to enhancing farmer incomes and promoting crop diversification.

MSP Policy and Determination

MSP is announced each year for 22 mandated crops. The Commission for Agricultural Costs & Prices (CACP) recommends MSP based on production costs, demand-supply, market prices, and economic factors. The cost of production includes labour, inputs, rent, depreciation, and interest. Since 2018-19, MSP is fixed at least 1.5 times the cost of production to ensure a minimum 50% margin for farmers.

Recent MSP Increases and Crop Coverage

For the Kharif Marketing Season 2025-26, MSP hikes were highest for nigerseed, ragi, cotton, and sesamum. Bajra, maize, tur, and urad farmers are assured margins exceeding 50%. For Rabi Marketing Season 2026-27, safflower and lentil received the largest MSP increases. Wheat’s MSP margin is the highest at 109%. These adjustments encourage farmers to diversify beyond cereals.

Procurement Mechanisms and PM-AASHA Scheme

Procurement is mainly done by the Food Corporation of India (FCI) and state agencies for cereals. The Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) safeguards farmers of pulses, oilseeds, and copra through the Price Support Scheme (PSS). It procures crops when market prices fall below MSP. Agencies like NAFED and NCCF buy directly from farmers, reducing intermediaries and distress sales.

Impact on Production and Farmer Income

MSP-driven procurement has boosted pulses production and reduced imports. Pulses procurement rose over 7,000% in 11 years. Oilseeds procurement increased by 1,500%. Wheat procurement reached 266 lakh metric tonnes in 2024-25, supporting food security. Overall foodgrain procurement rose from 761 lakh tonnes in 2014-15 to 1,175 lakh tonnes in 2024-25, benefiting 1.84 crore farmers.

Technology and Transparency in MSP Procurement

Digital platforms like e-Samriddhi and e-Samyukti enable online farmer registration, scheduling, and direct payments under PSS. The Kapas Kisan App facilitates cotton procurement with real-time updates and multilingual support. These tools reduce delays, paperwork, and exploitation, ensuring faster payments and transparency.

Towards Self-Sufficiency and Crop Diversification

The government targets self-sufficiency in pulses by 2027. It guarantees 100% procurement of tur, urad, and masoor from states for four years. The PM-AASHA procurement guarantee increased from ₹45,000 crore to ₹60,000 crore. This policy supports crop diversification and reduces import dependence, aligning with the vision of Atmanirbhar Bharat in agriculture.