Why in the News?

The Cabinet Committee on Economic Affairs (CCEA), led by Prime Minister Narendra Modi, has approved an increase in Minimum Support Prices (MSP) for Rabi crops for the Marketing Season 2025-26. The highest increase is ₹300 per quintal for Rapeseed & Mustard, followed by ₹275 for Lentil. Other crops like gram, wheat, safflower, and barley also saw significant increases, ensuring better income for farmers.

About Minimum Support Prices (MSP)

• Definition: A price support mechanism that acts as a safety net for farmers through guaranteed prices and assured markets for their products.
• Origin: Introduced in 1966-67 for wheat.
• Determination: Fixed twice a year by the Commission for Agricultural Costs and Prices (CACP), based on A2+FL costs incurred by farmers.
• CACP: Established in January 1965, it is an attached office of the Ministry of Agriculture and Farmers Welfare.
• Recommendations: The CACP presents its recommendations to the government through Price Policy Reports for five categories: Kharif crops, Rabi crops, Sugarcane, Raw Jute, and Copra.
• Approval: Requires sanction from the Cabinet Committee of Economic Affairs (CCEA).
• Approved By: Cabinet Committee of Economic Affairs (CCEA).
• Crops Covered: 23 commodities namely
  • 7 cereals (Paddy, Wheat, Barley, Maize, Bajra, Jowar and Ragi)
  • 5 Pulses (Chana, Arhar/Tur, Urad, Moong and Masoor)
  • 7Oilseeds (Groundnut, Rapeseed-Mustard, Soyabean, Sesamum, Sunflower, Safflower, Nigerseed)
  • 4 Commercial Crops (Copra, Sugarcane, Cotton and Raw Jute)
• Three Kinds of Production Cost
  • ‘A2’: Covers all paid-out costs directly incurred by the farmer in cash and kind on seeds, fertilisers, 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 for owned land and fixed capital assets, on top of A2+FL.
• The National Commission on Farmers (Swaminathan Committee) had also recommended MSP should be at least 50% more than the weighted average cost of production.