The Cabinet on Wednesday approved a 0.4%-8% increase in the minimum support price (MSP) of 14 major kharif crops for the 2026-27 kharif season (July-June), but raised the support price for paddy, the season’s key crop, by only a modest 3%.
This is second consecutive year the paddy MSP has been hiked moderately, while still adhering to the norm of MSP being 150% of the paid-up costs.
Cereal Pivot
With a huge surplus of rice stocks in the central pool, the signal to the farmers is to diversify into more remunerative crops like pulses and oilseeds, especially in northern Punjab and Haryana. With heatwaves and a below-normal monsoon feared to adversely impact the kharif crop, the regulated increase in paddy MSP to Rs 2441/quintal could hit farmers’ incomes. However, policymakers have a more compelling reason to put a lid on MSP increases considering the surge in economic costs of grains distributed under the National Food Security Act and the resultant spike in food subsidy.
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“Due to today’s decision, farmers will get over Rs 2.6 lakh crore by the way of MSP this season,” Information and Broadcasting Minister Ashwini Vaishnaw said. Vaishnaw said the MSPs have been fixed to ensure remunerative prices for farmers and are at least 50% above the cost of production across all 14 kharif crops.
The margins are estimated to be highest for moong (61% ), followed by bajra and maize (56%) and tur or arhar (54%).
Edible Oil Security
To boost oilseed production and reduce the country’s import of cooking oils, the MSP for sunflower and soybean has been hiked by 8.02% and 7.13% in the 2026-27 kharif season to Rs 8,343/quintal and Rs 5,708/quintal, respectively, compared to the previous year.
“The continued upward revision of MSP of oilseeds ensures remunerative returns to farmers and encourages higher domestic oilseed cultivation at the time when global agricultural markets remain volatile,” Sudhakar Desai, president, Indian Vegetable Oil Producers’ Association, said.
India imports 57% of its annual edible oil consumption of around 24 million tonne (MT).
The agriculture ministry stated that in recent years, the Government has been promoting the cultivation of crops, other than cereals such as pulses and oilseeds, and nutri-cereals or Shree Anna, by offering a higher MSP for these crops.
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Farmers’ income and the gross value added (GVA) in agriculture and allied sectors are a function of multiple factors. Apart from MSP and actual quantities procured at support prices, these include crop output, price realisation by various stakeholders in the open market, and exports. However, after a gap of almost two seasons, the MSP of maize increased by a nominal Rs 10 per quintal to Rs 2,410/quintal, which is lower than the hike for paddy.
The MSP for tur for the 2026-27 season will be Rs 8450/quintal, up 5.6% year-on-year. However, traders said current market prices remain lower, ranging between Rs 7,500/quintal to Rs 7,700/quintal, below the MSP of Rs 8000/quintal for the current 2025-26 season.
“Substantial hike in MSP of tur would encourage farmers to boost output while the government may initiate some regulation on the import of tur dal for boosting domestic prices,” Nitin Kalantri, MD, Kalantry Food, a Latur, Maharashtra-based leading processor of tur, told FE.
The MSP for cotton (medium staple) has been raised by OVER 7.2% to Rs 8,267/quintal compared to previous year.
The sowing of kharif crops begins from June and continues till August while harvesting of crops commences from October.
Government agencies such as the Food Corporation of India, farmers’ cooperative Nafed and NCCF and State government agencies carry out procurement of paddy, pulses and oilseeds under the MSP purchase operation. The Cotton Corporation of India procures when market prices fall below MSP.
TOPICSMSPThis article was first uploaded on May thirteen, twenty twenty-six, at twenty-one minutes past ten in the night.