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Cabinet approves increased MSP for 14 kharif crops for 2025–26 to boost farmer income.

News in Detail

The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister, approved a significant increase in Minimum Support Prices (MSP) for 14 Kharif crops for the Marketing Season 2025-26, with a total outlay of ₹2.07 lakh crore

Government's Strategic Focus

• Nutri-Cereals Promotion => The government continues to promote "Shree Anna" (nutri-cereals) cultivation by offering higher MSP rates. This aligns with nutritional security goals and sustainable agriculture practices.
• Budget 2018-19 Promise Fulfilled =>The MSP policy maintains the commitment of providing at least 1.5 times the all-India weighted average cost of production, ensuring farmer profitability.

What Are Kharif Crops?

Kharif crops are crops sown during the monsoon season (June to September) and harvested in the autumn (September to October). These include staples like paddy (rice), maize, and millets, as well as pulses like tur and urad, oilseeds like nigerseed and sesamum, and cash crops like cotton. The MSP hike covers 14 such crops, ensuring farmers growing these crops benefit from better prices.

What Is Minimum Support Price (MSP)?

It is a guaranteed price set by the Union Government at which it procures crops from farmers, ensuring they receive a fair income even if market prices fall.  

Introduced during the Green Revolution (1966-67), it serves as both an economic safety net and a policy tool for agricultural production management.

The Commission for Agricultural Costs and Prices (CACP) recommends MSPs for 23 crops (14 kharif, 6 rabi, and 3 commercial crops) based on factors like production costs, market trends, and demand-supply dynamics.

Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister, makes the final decision on Minimum Support Prices (MSP).  

Recent Decision: Economic Impact & Implications

Positive Impacts

• Farmer Income Security: Guaranteed minimum returns reduce income volatility
• Crop Diversification: Higher MSP for oilseeds and pulses encourages diversification
• Nutritional Security: Focus on nutri-cereals improves dietary diversity
• Rural Economy Boost: ₹2.07 lakh crore injection into rural economy
• Food Security: Ensures adequate production of essential crops

Challenges

• Fiscal Burden: The substantial outlay puts pressure on government finances and may require efficient targeting to ensure maximum benefit reaches intended farmers.
• Market Distortion Risks: While MSP provides security, overreliance may reduce market responsiveness and efficiency in the agricultural sector.
• Implementation Challenges: Ensuring effective procurement infrastructure and preventing leakages remains crucial for policy success.

Way Forward

• Technology Integration => Leverage digital platforms for efficient MSP implementation and farmer registration
• Quality Enhancement => Link MSP to quality parameters to encourage better farming practices
• Market Linkages => Strengthen direct marketing channels to reduce intermediary costs
• Climate Resilience => Promote climate-resilient varieties with appropriate MSP incentives
• Storage Infrastructure => Develop robust storage facilities to minimize post-harvest losses

The MSP policy must balance farmer welfare with fiscal sustainability. Future policy should focus on productivity enhancement, sustainable farming practices, and gradual transition towards market-oriented agriculture while maintaining the social safety net for farmers.

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Increase in MSP for Kharif Crops 

Source: 

THE  HINDU