NEW DELHI, 28 December 2025: The Government continues to strengthen farmer income support through the Minimum Support Price (MSP) mechanism and an extensive procurement framework. Every year, MSPs are fixed for 22 mandated agricultural crops based on recommendations of the Commission for Agricultural Costs and Prices (CACP), after taking into account the views of State Governments and concerned Central Ministries and Departments.
As announced in the Union Budget 2018–19, MSPs are determined at levels of at least 1.5 times the cost of production. In line with this pre-determined principle, MSPs for all mandated Kharif, Rabi, and other commercial crops have been increased from the 2018–19 season onwards, ensuring a minimum return of 50 per cent over the all-India weighted average cost of production.
To operationalise the MSP policy, the Government offers procurement of agricultural produce through designated agencies, while farmers retain the freedom to sell their crops either to government agencies or in the open market, depending on what is more advantageous.
Cereals and coarse cereals are procured through the Food Corporation of India (FCI) and other designated State agencies to provide price support to farmers. Pulses, oilseeds, and copra are procured under the Price Support Scheme (PSS) of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA), in consultation with State Governments, whenever market prices fall below MSP. The National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) and the National Cooperative Consumers’ Federation of India Ltd. (NCCF) act as procurement agencies under this scheme. Cotton and jute are procured at MSP through the Cotton Corporation of India (CCI) and the Jute Corporation of India (JCI), respectively.
The impact of higher MSPs is reflected in increased procurement volumes and the total MSP amount paid to farmers, underscoring the role of MSP and procurement operations in enhancing farm incomes across the country.
