The Cabinet Sanctions FY26 Minimum Support Price for Kharif Crop; Rice MSP Experiences a 3 Percent Rise
Government Approval on Minimum Support Prices for Kharif Crops
The Indian government has sanctioned the Minimum Support Price (MSP) for 15 different crops, including staples like rice, jowar, bajra, pulses, soybean, and cotton. Notably, the MSP for crops such as nigerseed, ragi, and cotton has seen significant enhancements. However, the MSP for rice, which is a major component of Kharif production, has experienced a mere 3 percent increase.
MSP Allocation for the 2025-26 Marketing Season
The Cabinet Committee on Economic Affairs has approved an MSP allocation amounting to ₹2.07 lakh crore for the upcoming marketing season of the Kharif crop in 2025-26. The government outlines the MSP for rice or paddy as ₹2,369 per quintal (100 kg), marking an increase of just ₹69 from last year’s price of ₹2,300 per quintal. This increment is the smallest recorded for rice MSP in the past five years, compared to a rise of 5.4 percent witnessed the previous year.
India’s Role in Global Rice Production
As the second-largest rice producer globally and the leading exporter, India commands approximately 40 percent of the international export market. Rice constitutes about 96 percent of the total Kharif crop yield in the nation. According to data from the Cabinet Committee, India procured 7,608 lakh metric tonnes of rice over the last decade, from 2014-15 to 2024-25. For perspective, total procurement of 14 Kharif crops during the same timeframe reached 7,871 lakh metric tonnes.
Understanding the Rationale Behind MSP Fixation
The government’s rationale for determining the MSP is aimed at ensuring farmers receive at least 1.5 times the all-India weighted average cost of production. The Cabinet Committee’s report suggests that farmers benefit from a 50 percent margin over their production costs for rice. While this slight increase in the MSP may allow exporters to remain competitive internationally, it could adversely affect the profit margins for domestic farmers.
Recent Changes in MSP for Other Crops
In terms of other crops, nigerseed has experienced the most substantial rise, with its MSP increasing by ₹820 per quintal to reach ₹8,717 per quintal. Ragi and cotton also saw significant increases, with MSP rising by ₹596 and ₹589 per quintal, respectively. Pulses have similarly benefited, with MSP for Arhar and Urad rising by ₹450 and ₹400 per quintal, although the increase for Moong has been modest at just ₹89 per quintal.
