Minimum Support Prices (MSP) for Rabi Crops for Marketing Season 2024-25
The Cabinet Committee on Economic Affairs (CCEA) chaired by Hon’ble Prime Minister Shri Narendra Modi has approved increasing the Minimum Support Prices (MSP) for all mandated Rabi Crops for Marketing Season 2024-25.
The absolute highest increase in MSP has been approved for lentil (masur) at Rs.425 per quintal followed by rapeseed & mustard at Rs.200 per quintal. For wheat and safflower, an increase of Rs.150 per quintal each has been approved. For barley and gram an increase of Rs.115 per quintal and Rs.105 per quintal respectively, has been approved.
MSP for all Rabi Crops for Marketing Season 2024-25
(Rs.per quintal)| Crop | MSP (2023 - 24) |
MSP (2024 - 25) |
Increase |
|---|---|---|---|
| Wheat | 2125 | 2275 | 150 |
| Barley | 1675 | 1850 | 115 |
| Gram | 5335 | 5445 | 105 |
| Lentil | 6000 | 6425 | 425 |
| Rapeseed & Mustards |
5450 | 5650 | 200 |
| Safflower | 5650 | 5800 | 150 |
About Minimum Support Price (MSP)
- The MSP is the rate at which the government purchases crops from farmers, and is based on a calculation of at least one-and-a-half times the cost of production incurred by the farmers.
- MSP is a “minimum price” for any crop that the government considers remunerative for farmers, hence deserving “support”.
Crops under MSP:
- The Commission for Agricultural Costs & Prices (CACP) recommends MSPs for 22 mandated crops and fair and remunerative prices (FRP) for sugarcane.
- CACP is an attached office of the Ministry of Agriculture and Farmers Welfare.
- The mandated crops include 14 crops of the Kharif season, 6 rabi crops, and 2 other commercial crops.
- In addition, toria and de-husked coconut are fixed based on the MSPs of rapeseed/mustard and copra MSPs, respectively.
Factors for Recommending the MSP:
- The CACP considers various factors while recommending the MSP for a commodity, including the cost of cultivation.
- It takes into account the supply and demand situation for the commodity, market price trends (domestic and global) and parity vis-à-vis other crops, and implications for consumers (inflation), environment (soil and water use), and terms of trade between agriculture and non-agriculture sectors.
Three Kinds of Production Costs:
- The CACP projects three kinds of production costs for every crop, both at the state and all-India average levels.
- ‘A2’:
- Covers all paid-out costs directly incurred by the farmer in cash and kind on seeds, fertilizers, pesticides, hired labour, leased-in land, fuel, irrigation, etc.
- ‘A2+FL’
- Includes A2 plus an imputed value of unpaid family labour.
- ‘C2’It is a more comprehensive cost that factors in rentals and interest forgone on owned land and fixed capital assets, on top of A2+FL.
- CACP considers both A2+FL and C2 costs while recommending MSP.
- CACP reckons only A2+FL cost for return.
- However, C2 costs are used by CACP primarily as benchmark reference costs (opportunity costs) to see if the MSPs recommended by them at least cover these costs in some of the central producing States.
- The Cabinet Committee on Economic Affairs (CCEA) of the Union government takes a final decision on the level of MSPs and other recommendations made by the CACP.
Significance of MSP Hike:
- The added focus on Nutri-rich Nutri-cereals is to incentivize its production in the areas where rice-wheat cannot be grown without long-term adverse implications for the groundwater table.
- Concerted efforts have been made over the last few years to realign the MSPs in favour of oilseeds, pulses, and coarse cereals to encourage farmers to shift to larger areas under these crops and adopt the best technologies and farm practices, to correct the demand-supply imbalance.
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