Minimum Support Prices: From Safety Net to Self-Sufficiency

• 16 Oct 2025

For Prelims: Pulses, Minimum Support Price (MSP), El Niño, Mission for Self-reliance in Pulses, Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) Scheme.   

For Mains: Trends in India’s pulses production and imports, Issues regarding India’s pulses production and import, Measures needed to achieve self-sufficiency in pulses.

Source: PIB 

Why in News?

The Government of India has approved the Minimum Support Prices (MSP) for Rabi Marketing Season (RMS) 2026–27, with an estimated procurement of 297 Lakh Metric Tonnes (LMT). This marks a shift in MSP policy from mere price support to promoting self-sufficiency, particularly in pulses and oilseeds. 

Minimum Support Price (MSP) 

• Definition: MSP is the price at which the government procures crops directly from farmers, offering them assured income and protection from market volatility. 
• Determination: 
  • MSPs are recommended by the Commission for Agricultural Costs and Prices (CACP) — an attached office under the Ministry of Agriculture and Farmers Welfare, established in 1965. 
  • The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister, gives the final approval. 
• Criteria Considered: 
  • Cost of production, demand-supply dynamics, market price trends, inter-crop price parity, and terms of trade between agriculture and non-agriculture sectors. 
  • Since 2018–19, MSPs have been fixed at 1.5 times the cost of production, ensuring a minimum 50% profit margin for farmers. 
• Crops Covered: 
  • MSP is declared for 22 mandated crops — including 14 Kharif crops, 6 Rabi crops, and 2 commercial crops — plus a Fair and Remunerative Price (FRP) for sugarcane. 
• Procurement Framework 
  • Cereals and coarse cereals: Procured by Food Corporation of India (FCI) and state agencies. 
  • Pulses, oilseeds, copra: Procured under Price Support Scheme (PSS) of PM-AASHA through NAFED and NCCF. 
  • Cotton & Jute: Procured at MSP via Cotton Corporation of India (CCI) and Jute Corporation of India (JCI). 
  • No maximum procurement limit for jute and cotton 

How has the MSP Policy Evolved to Support India’s Agricultural Growth? 

• MSP as a Safety Net: The MSP serves as a crucial safety net for farmers, ensuring that they receive a fair return for their produce, especially when market prices fluctuate or fall below production costs. 
  • By guaranteeing a minimum price, the MSP protects farmers from distress sales, preventing them from incurring losses in times of market instability. 
• Promoting Crop Diversification: The policy increasingly encourages nutri-cereals and oilseeds, aligning agriculture with national priorities like food security (through PDS) and climate resilience. 
  • Higher MSPs for crops like ragi, nigerseed, and mustard aim to promote climate-resilient farming, reducing the over-dependence on water-intensive crops like paddy. 
• Increasing Farmers’ Beneficiaries: The number of farmers benefiting from MSP payments has grown to 1.84 crore as of the 2024–25 period, showcasing the scalability of the MSP scheme and its wider reach in rural India. 
  • The Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) scheme, which guarantees the procurement of pulses, oilseeds, and copra, has seen an increase in financial backing, from ₹45,000 crore to ₹60,000 crore, further supporting farmers' incomes. 
• Expanding MSP Procurement: Between 2014-15 and 2024-25, the volume of food grains procured under MSP increased significantly from 761 lakh metric tonnes to 1,175 lakh metric tonnes.  
  • India aims for self-sufficiency in pulses by 2027, with the government committed to procure 100% of major pulse production until 2028-29. 
• Digital Transparency: Platforms like e-Samriddhi, e-Samyukti, and the Kapas Kisan App enable online registration, quality assessment, and direct payments, reducing delays and middlemen. 

What are the Challenges Related to MSP in India, & Suggest Measures to Tackle Them?

Challenges (Mnemonic: COSTI)	Way Forward (Mnemonic: GROWTH)
C - Costly Procurement: High costs of procurement, storage, and subsidies create a fiscal burden on the government and strain the Food Corporation of India (FCI)..	G - Greater Coverage: Expand MSP procurement to include more pulses, oilseeds, millets, and other crops, ensuring broader inclusivity and price assurance for more farmers.
O - Over-reliance on Wheat & Rice: The focus on rice and wheat leads to monocropping, resulting in groundwater depletion and soil degradation, particularly in north-western states.	R - Reform Procurement Systems: Strengthen local procurement infrastructure, improve storage and supply chain efficiency, and advance Public-Private Partnerships (PPP) to reduce fiscal strain.
S - Skewed Benefits: MSP benefits are concentrated in a few states and crops, leaving out a majority of farmers.	O - Outreach & Awareness: Raise farmer awareness and use digital platforms for registration, monitoring, and direct cash transfers to ensure transparency and efficient delivery of benefits.
T - Transparency Issues: Poor awareness, weak procurement infrastructure, and limited access to MSP centers prevent many farmers from receiving MSP benefits.	W - Wider Crop Diversification: Align MSP incentives with sustainable cropping systems, encouraging diversification toward millets, pulses, and oilseeds to reduce environmental impacts from monocropping.
I - Inefficient Implementation:  The Shanta Kumar Committee's 2015 report reveals that just 6% of farmers benefit from the Minimum Support Price, meaning that 94% of farmers do not gain the intended advantages of the MSP.	T - Timely Enforcement: Ensure strict monitoring of MSP guidelines, improve regulatory frameworks, and enforcement at local levels.
	H - Holistic Approach: Move towards a comprehensive solution by integrating MSP with income support schemes and market reforms to address long-term farmer welfare and agricultural sustainability.

Conclusion 

The new MSP approvals reinforce the Government’s commitment to farmer welfare and price assurance. By ensuring 50%+ returns over cost, expanding digital procurement platforms, and strengthening the PM-AASHA framework, India is advancing toward self-reliance in pulses, oilseeds, and nutri-cereals, while ensuring agricultural diversification and income security.

Drishti Mains Question

Q: Discuss how MSP and PM-AASHA support farmer income and promote self-sufficiency in India.

 

Frequently Asked Questions (FAQs)  

1. What is MSP? 
MSP is the assured price at which the government procures crops directly from farmers. 

2. What is the purpose of Minimum Support Price (MSP)? 
MSP ensures farmers receive remunerative prices, prevents distress sales, and promotes crop diversification. 

3. Which crops are covered under MSP? 
MSP is declared for 22 mandated crops — 14 Kharif, 6 Rabi, and 2 commercial crops — plus sugarcane under FRP. 

UPSC Civil Services Examination, Previous Year Question (PYQ)  

Prelims

Q. How is permaculture farming different from conventional chemical farming? (2021)

1. Permaculture farming discourages monocultural practices but in conventional chemical farming, monoculture practices are predominant. 
2. Conventional chemical farming can cause an increase in soil salinity but the occurrence of such phenomenon is not observed in permaculture farming. 
3. Conventional chemical farming is easily possible in semi-arid regions but permaculture farming is not so easily possible in such regions. 
4. Practice of mulching is very important in permaculture farming but not necessarily so in conventional chemical farming. 

Select the correct answer using the code given below.  

(a) 1 and 3   

(b) 1, 2 and 4  

(c) 4 only   

(d) 2 and 3  

Ans: (b)   

Q. Consider the following agricultural practices: (2012)

1. Contour bunding 
2. Relay cropping 
3. Zero tillage 

In the context of global climate change, which of the above helps/help in carbon sequestration/storage in the soil?  

(a) 1 and 2 only   

(b) 3 only  

(c) 1, 2 and 3   

(d) None of them  

Ans: (b)

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Mains Questions

Q. What do you mean by Minimum Support Price (MSP)? How will MSP rescue the farmers from the low income trap? (2018)

Q. How do subsidies affect the cropping pattern, crop diversity and economy of farmers? What is the significance of crop insurance, minimum support price and food processing for small and marginal farmers? (2017)