Govt approves MSP on 6 Rabi crops with estimated payout of Rs 90,962 crore

New Delhi: The government has approved an increase in the Minimum Support Prices (MSP) for all mandated Rabi Crops for Marketing Season 2027-28 on 30 September 2026 with an estimated Rs 90,962 crore to be paid to farmers for 324 lakh metric tonnes (MT) of produce.

Procurement of six Rabi crops increased from 2,302 lakh metric tonnes (LMT) during 2004-05 to 2013-14 to 3,921 LMT during 2014-15 to 2025-26. Correspondingly, MSP payments rose from Rs 2.65 lakh crore to Rs 8.36 lakh crore.

The highest absolute increase in MSP has been announced for safflower at Rs 675 per quintal. This is followed by rapeseed & mustard at Rs 413 per quintal, lentil (masur) at Rs 390 per quintal, and barley at Rs 136 per quintal. MSPs for wheat and gram have also been increased compared with the previous year.

In terms of returns over the cost of production, wheat records the highest estimated margin at 106%, followed by rapeseed and mustard at 96%, lentil (masur) at 92%, and gram at 59%. During the Rabi Marketing Season (RMS) 2027-28, an estimated Rs 90,962 crore is expected to be paid to farmers for 324 lakh metric tonnes (MT) of produce. The enhanced MSPs for rabi crops are intended to ensure remunerative prices for farmers while incentivizing crop diversification.

The government announces Minimum Support Prices (MSPs) annually for 22 mandated agricultural crops. These MSPs are based on recommendations from the Commission for Agricultural Costs and Prices (CACP). The recommendations consider the views of concerned State Governments and Central Ministries/Departments. Additionally, MSP for Toria and de-husked coconut are determined based on the MSPs announced for rapeseed and mustard, and copra.

The CACP considers several factors while recommending MSPs for different crops. These include cost of production, demand and supply of crops in domestic and global markets, domestic and international prices, inter-crop price parity, terms of trade between agriculture and non-agriculture sectors, likely impact of price policy on the wider economy, and a minimum margin of 50 percent over the cost of production.

The cost of production used in MSP calculations includes paid-out expenses on hired human, bullock and machine labour, leased-in land, seeds, fertilisers, manure, and irrigation. It also accounts for diesel and electricity used to operate pump sets, depreciation on farm implements and buildings, interest on working capital, and other miscellaneous expenses. Additionally, the imputed value of family labour is included to recognise the contribution of family members engaged in agricultural activities. The same cost-estimation formula is applied uniformly across all 22 mandated crops and across States for calculating MSPs.

"Minimum Support Price (MSP) remains an important policy instrument for supporting farmers against market price fluctuations and providing greater assurance in agricultural planning and investment. The MSP decisions for Rabi Marketing Season (RMS) 2027-28 continue to provide for a minimum margin of 50 percent over the cost of production," said an official note.