NEW DELHI, 25 December 2025: The Government of India continues to reinforce farmer income security through an expanded Minimum Support Price (MSP) framework and a multi-agency procurement mechanism covering a wide range of agricultural commodities.
Each year, MSPs are fixed for 22 mandated crops based on recommendations of the Commission for Agricultural Costs and Prices (CACP), following consultations with state governments and concerned central ministries and departments. The pricing framework is guided by a pre-determined policy principle announced in the Union Budget 2018–19, under which MSPs are set at a minimum of 1.5 times the all-India weighted average cost of production.
In line with this policy, the government has increased MSPs for all mandated Kharif, Rabi and commercial crops from the 2018–19 season onwards, ensuring a minimum return of 50% over production costs. The objective is to provide assured price support and reduce income volatility for farmers across crop cycles.
To operationalise MSP benefits, the government offers procurement through designated central and state agencies. Farmers retain the flexibility to sell their produce either to government agencies at MSP or in the open market, depending on prevailing prices and commercial advantage.
Cereals and coarse cereals are procured primarily through the Food Corporation of India (FCI) and other designated state agencies to stabilise prices and ensure food security. Procurement of pulses, oilseeds and copra is undertaken under the Price Support Scheme (PSS), a key component of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA). Under this framework, procurement is triggered in consultation with state governments when market prices fall below MSP levels.
The central procurement agencies under PM-AASHA include the National Agricultural Cooperative Marketing Federation of India (NAFED) and the National Co-operative Consumers’ Federation of India (NCCF). In addition, the government procures cotton and jute at MSP through the Cotton Corporation of India (CCI) and the Jute Corporation of India (JCI), respectively, ensuring coverage across major commercial crops.
According to the government, higher MSPs and expanded procurement operations have translated into tangible benefits for farmers, as reflected in rising procurement volumes and increased MSP payments made directly to producers. The policy framework is positioned as a cornerstone of India’s broader strategy to stabilise farm incomes, encourage production and safeguard farmers against market downturns.
Image credit: gokulamseekias.com
