Cabinet approves hike in MSP for kharif crops; outlay stands at ₹2.07 lakh crore, Pg4

Key Highlights:

• MSP hiked for 14 kharif crops for the 2025–26 marketing season.
• Total outlay: ₹2.07 lakh crore approved by the Cabinet Committee on Economic Affairs.
• Highest absolute MSP increase: Nigerseed (₹820/qtl), followed by ragi (₹596), cotton (₹589), and sesamum (₹579).
• MSP margin over production cost highest for bajra (63%), followed by maize and tur (59%), urad (53%).
• Hike aligned with the Union Budget 2018-19 commitment of MSP = 1.5x weighted cost of production.
• Nutri-cereals (“Shree Anna”) continue to be incentivized through higher MSPs.
• Procurement of kharif crops has risen from 4,679 lakh tonnes (2004–14) to 7,871 lakh tonnes (2014–25).

Detailed Insights:

• The hike aims to ensure remunerative returns to farmers and boost rural incomes, particularly in the backdrop of input cost inflation.
• Higher MSP for nigerseed, ragi, and cotton supports diversification beyond staples like rice and wheat.
• Enhanced margins for crops like bajra, tur, and maize encourage nutri-cereal and pulse cultivation, aiding nutritional security and sustainable agriculture.
• The policy is part of a larger push to meet the doubling farmers’ income goal and address agrarian distress.
• While MSP is a price signal, actual benefits depend on procurement infrastructure and market access—areas needing policy focus.

Key Concepts Involved:

• Minimum Support Price (MSP): Price at which government procures crops from farmers to safeguard them against sharp market fluctuations.
• All-India Weighted Average Cost of Production: Calculated by the Commission for Agricultural Costs and Prices (CACP); forms the basis for MSP.
• Nutri-Cereals (Shree Anna): Millets and similar crops promoted for their nutritional value, climate resilience, and sustainability.

Mains Mock Question:

Critically analyze the efficacy of the Minimum Support Price (MSP) scheme in protecting Indian farmers from price fluctuations and market imperfections.