India’s agricultural sector, which supports nearly half the population, is shaped by both the promise of seasonal harvests and the perils of unpredictability. Unseasonal rains, droughts, floods, and price fluctuations continue to pose serious threats to farmers’ incomes. For millions of small and marginal farmers, whose livelihoods depend entirely on crop outcomes, these risks can translate into debt, distress sales, or even withdrawal from agriculture altogether.
The Minimum Support Price (MSP) serves as a vital policy instrument. It guarantees a pre-announced price for various crops, ensuring that farmers are shielded from sudden market crashes. MSP reassures them that they will receive a fair return on their produce, even when open market prices fall below cost. This promise enables farmers to make investment decisions with greater confidence, encouraging the adoption of better inputs and technology.
The Government of India currently announces MSPs for 22 mandated crops, including cereals, pulses, oilseeds, and commercial crops like cotton and jute. It also sets prices for Toria and de-husked coconut, based on related crops. The calculation of MSP is guided by recommendations from the Commission for Agricultural Costs and Prices (CACP), which factors in a range of considerations—such as production costs, market trends, inter-crop parity, and terms of trade. A key policy commitment since 2018–19 has been to set the MSP at least 1.5 times the cost of production, including paid-out expenses and the imputed value of family labour. This ensures a minimum 50% profit margin to farmers, while also recognizing the contributions of the entire farm household.
In October 2025, the government approved the MSPs for the Rabi Marketing Season of 2026–27. The decision is expected to benefit a large number of wheat, gram, lentil, and mustard farmers. Wheat, in particular, will now be procured at ₹2,585 per quintal, offering a 109% margin over the average cost of production. This move strengthens farmers’ income prospects and incentivizes the cultivation of essential Rabi crops. Similar increases were introduced earlier for Kharif crops in the 2025–26 season, including rice, pulses, and oilseeds. Among these, significant MSP gains were announced for crops like nigerseed and ragi, while key pulses such as tur and urad have seen margin improvements to promote domestic production and reduce import dependency.
Over the years, the role of MSP has steadily evolved from a basic price support mechanism to a broader tool for agricultural development. Between 2014–15 and 2024–25, the volume of food grains procured at MSP grew substantially from about 761 lakh metric tonnes to over 1,175 lakh metric tonnes. The corresponding financial outlay also rose from ₹1.06 lakh crore to ₹3.33 lakh crore, reflecting the scale of government support extended to farmers. In the same period, the number of farmers benefiting from MSP payments rose to 1.84 crore. These figures illustrate the strengthening of procurement infrastructure and the government’s commitment to agricultural income security.
To support MSP-based procurement, particularly when market prices fall below government-fixed levels, the government operates the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA). One of its core components is the Price Support Scheme (PSS), which ensures the procurement of pulses, oilseeds, and copra directly from registered farmers. These purchases are handled by agencies such as the National Agricultural Cooperative Marketing Federation (NAFED) and the National Cooperative Consumers’ Federation (NCCF), minimizing middlemen and ensuring farmers are paid promptly and fairly. The scheme has been extended until the end of 2025–26, reinforcing its long-term importance.
A key strategic goal announced by the government is to achieve self-sufficiency in pulses by 2027. To that end, the government has pledged to procure 100% of the production of major pulses like tur, urad, and masoor until 2028–29. A notable step in this direction is the increase in financial backing for PM-AASHA from ₹45,000 crore to ₹60,000 crore. By March 2025, around 2.46 lakh metric tonnes of tur had already been procured from five states, benefitting over 1.7 lakh farmers.
The impact of MSP-led procurement is especially visible in long-term trends. Between 2009 and 2025, the procurement of pulses increased dramatically by over 7,000% indicating a major shift in production and procurement priorities. Oilseed procurement also rose more than 15-fold in the same period. Paddy procurement surged from 4,590 lakh metric tonnes between 2004–14 to over 7,600 lakh metric tonnes in the following decade. These expansions have been accompanied by sharp increases in MSP payouts, reflecting both enhanced production and improved procurement systems.
Wheat procurement too has seen significant gains. During the Rabi season of 2024–25, the Food Corporation of India (FCI) procured 266 lakh metric tonnes of wheat, benefitting more than 22 lakh farmers. Nearly ₹61,000 crore was transferred directly into farmers’ accounts, showing the practical value of MSP in ensuring fair compensation and reducing income uncertainty.
To improve transparency and simplify the procurement process, several digital platforms have been launched. For pulses and oilseeds, the e-Samriddhi (by NAFED) and e-Samyukti (by NCCF) platforms facilitate everything from farmer registration to payment processing. These platforms verify land records, schedule procurement slots, and ensure direct transfers of MSP payments, reducing delays and eliminating middlemen. Similarly, for cotton, the Kapas Kisan App developed by the Cotton Corporation of India enables farmers to manage registration, bookings, and real-time updates on payments and quality checks, further easing the procurement experience.
The broader objective of the MSP policy is not limited to price protection. It is being increasingly used to steer crop diversification and promote sustainable agriculture. The government’s focus on nutri-cereals, also known as Shree Anna, and oilseeds is part of a strategy to encourage farmers to shift away from water-intensive cereals towards more climate-resilient and nutrition-rich crops. Offering higher MSP margins for these crops not only improves farm incomes but also aligns agriculture with national goals of food security and environmental sustainability.
In essence, the MSP regime is being transformed from a mere safety net into a strategic lever for long-term agricultural growth. The rising trend in procurement, expanding digital infrastructure, growing number of beneficiaries, and targeted focus on pulses and oilseeds all point toward a more robust and self-reliant farm economy. By combining price assurance with policy support, the government is enabling Indian farmers to invest with confidence, contribute to national food security, and build an agriculture system that is not only productive but also sustainable and inclusive.