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The full form of MSP is the Minimum Support Price.
What is MSP for farmers?
The key objectives include nationwide surveying and registration, scientific conservation, large-scale digitization, and public outreach.
How many crops are covered under MSP?
Currently, 22 crops are covered under the MSP policy, including cereals, pulses, oilseeds, and commercial crops.
Who announces the Minimum Support Price (MSP)?
The Government of India, based on recommendations from the Commission for Agricultural Costs and Prices (CACP), announces MSP.
What is the A2+FL formula in MSP?
The A2+FL formula includes actual paid-out costs (A2) plus the imputed cost of family labour (FL) to determine fair pricing.
Minimum Support Price (MSP), Crop List, UPSC PYQs
Minimum Support Price (MSP) is a pre-determined price set by the government to insure farmers. The Minimum Support Price is announced annually for 22 major agricultural commodities.
Deeksha Dixit26 Mar, 2025
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Minimum Support Price (MSP) is a market intervention scheme under which the government announces a pre-determined price for 22 crops and steps in to purchase when the market price falls below it. The Minimum Support Price ensures that farmers receive a guaranteed price and protects them from volatile market prices. Read on to learn more about MSP!
What is the Minimum Support Price (MSP)?
The Minimum Support Price (MSP) is the minimum price set by the government for certain crops. It ensures that farmers get a fair price for their produce, even when market prices drop. MSP was introduced in 1966-67 as part of agricultural reforms aimed at enhancing food security during the Green Revolution. It acts as a safety net to prevent farmers from incurring heavy losses.
The Indian government announces MSP twice a year before the Kharif (monsoon) and Rabi (winter) sowing season. The objective is to provide financial security and encourage farmers to grow essential crops. The Commission for Agricultural Costs and Prices (CACP) recommends MSP, and the Cabinet Committee on Economic Affairs (CCEA) approves it.
List of Crops Covered Under MSP
The government sets MSP for 22 crops to support farmers. It includes 14 Kharif, 6 Rabi, and 2 commercial crops:
Kharif Crops:
Paddy
Jowar
Bajra
Ragi
Maize
Tur (Arhar)
Moong
Urad
Groundnut
Sunflower Seed
Soyabean (Yellow)
Sesamum
Nigerseed
Cotton
Rabi Crops:
Wheat
Barley
Gram
Masur (Lentil)
Rapeseed & Mustard
Safflower
Commercial Crops:
Copra
Jute
Additionally, MSP for Toria and de-husked coconut is also fixed by the government based on MSPs of rapeseed & mustard, and copra, respectively. The government revises MSP every year based on economic and agricultural conditions.
How MSP is Determined?
The Commission for Agricultural Costs and Prices (CACP) recommends MSP based on multiple factors. The government considers these factors before announcing MSP:
Cost of Production: The primary factor is the cost of inputs like seeds, fertilizers, irrigation, and labour. A minimum margin of 50% over the cost of production is ensured.
Demand and Supply: The price is set by analyzing market trends and consumer demand.
Market Price Trends: The government studies the domestic and international prices to ensure MSP is competitive.
Inter-Crop Price Parity: The price balance between different crops is maintained to encourage diversified farming.
Terms of Trade: The government also considers the terms of trade between the agricultural and non-agricultural sectors when fixing MSPs.
Other factors include:
Changes in input prices
Input-output price parity
Industrial cost structure
Cost of living
issue prices and implications for subsidy
Parity between prices paid and prices received by the farmers.
The government uses the A2+FL formula, which includes the actual paid-out cost (A2) plus the imputed value of family labour (FL), to set a fair MSP. It is typically set at least 1.5 times the cost of production.
Why is MSP Required?
MSP plays a crucial role in Indian agriculture. It provides stability, security, and motivation for farmers to continue production. Here’s why MSP is essential:
Ensures Farmers’ Income: It guarantees farmers a minimum income, protecting them from losses.
Encourages Crop Production: Farmers grow more staple crops, ensuring food security in India.
Reduces Market Uncertainty: It prevents drastic price falls during bumper harvests.
Supports Rural Economy: MSP uplifts the agricultural sector, which employs a large part of India's workforce.
Prevents Exploitation: Traders cannot force farmers to sell at lower prices due to MSP support.
Promotes Sustainable Farming: By offering MSP on various crops, the government encourages balanced farming practices.
Latest Minimum Support Price 2025-26
According to the website of the Directorate of Economics and Statistics, Ministry of Agriculture and Farmers Welfare, the latest Minimum Support Price (Rs. per quintal) applicable for the 2025-26 season is as follows as of 22 January 2025:
Commodity
Variety
2023-24
2024-25
Increase in MSP (2024-25 over 2023-24)
Kharif Crops
Paddy
Common
2183
2300
117 (5.4%)
Grade 'A'
2203
2320
117 (5.3%)
Jowar
Hybrid
3180
3371
191 (6.0%)
Maldandi
3225
3421
196 (6.1%)
Bajra
2500
2625
125 (5.0%)
Ragi
3846
4290
444 (11.5%)
Maize
2090
2225
135 (6.5%)
Tur (Arhar)
7000
7550
550 (7.9%)
Moong
8558
8682
124 (1.4%)
Urad
6950
7400
450 (6.5%)
Groundnut
6377
6783
406 (6.4%)
Sunflower Seed
6760
7280
520 (7.7%)
Soyabeen (Yellow)
4600
4892
292 (6.3%)
Sesamum
8635
9267
632 (7.3%)
Nigerseed
7734
8717
983 (12.7%)
Cotton
Medium Staple
6620
7121
501 (7.6%)
Long Staple
7020
7521
501 (7.1%)
Rabi Crops
Wheat
2275
2425
150 (6.6%)
Barley
1850
1980
130 (7.0%)
Gram
5440
5650
210 (3.9%)
Masur (Lentil)
6425
6700
275 (4.3%)
Rapeseed & Mustard
5650
5950
300 (5.3%)
Safflower
5800
5940
140 (2.4%)
Toria
5650
5950
300 (5.3%)
Commercial Crops
Copra
Milling
10860
11160
300 (2.8%)
Ball
11750
12000
250 (2.1%)
De-Husked Coconut
2930
3013
83 (2.8%)
Jute
5050
5335
285 (5.6%)
Note: The government fixed the MSP for Fair Average Quality of Milling Copra at ₹ 11582/- per quintal and for Ball Copra at ₹ 12100/- per quintal for the 2025 season. The government has also increased MSP for Raw Jute (TD-3 grade) at ₹ 5650/- per quintal for 2025-26.
UPSC PYQs on Minimum Support Price
Here are previous year's questions that were asked in the Civil Service examination on MSP:
UPSC Prelims 2023: Consider the following statements:
The Government of India provides Minimum Support Price for niger (Guizotia abyssinica) seeds.
Niger is cultivated as a Kharif crop.
Some tribal people in India use niger seed oil for cooking.
How many of the above statements are correct?
(a) Only one
(b) Only two
(c) All three
(d) None
UPSC Prelims 2020: Consider the following statements:
In the case of all cereals, pulses, and oil seeds, the procurement at Minimum Support price (MSP) is unlimited in any State/UT of India.
In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise.
Which of the statements given above is/are correct?
Minimum Support Price (MSP) is a critical policy for Indian farmers. It ensures fair pricing, financial security, and market stability. The government determines MSP based on production costs and market trends. While it has many benefits, improvements in implementation can make it more effective.
