Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices. The minimum support prices are announced by the Government of India at the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP). MSP is price fixed by Government of India to protect the producer - farmers - against excessive fall in price during bumper production years. The minimum support prices are a guarantee price for their produce from the Government. The major objectives are to support the farmers from distress sales and to procure food grains for public distribution. In case the market price for the commodity falls below the announced minimum price due to bumper production and glut in the market, government agencies purchase the entire quantity offered by the farmers at the announced minimum price.
The Price Support Policy of the Government is directed at providing insurance to agricultural producers against any sharp fall in farm prices. The minimum guaranteed prices are fixed to set a floor below which market prices cannot fall. Till the mid 1970s, Government announced two types of administered prices :
The MSPs served as the floor prices and were fixed by the Government in the nature of a long-term guarantee for investment decisions of producers, with the assurance that prices of their commodities would not be allowed to fall below the level fixed by the Government, even in the case of a bumper crop. Procurement prices were the prices of kharif and rabi cereals at which the grain was to be domestically procured by public agencies (like the FCI) for release through PDS. It was announced soon after harvest began. Normally procurement price was lower than the open market price and higher than the MSP. This policy of two official prices being announced continued with some variation upto 1973-74, in the case of paddy. In the case of wheat it was discontinued in 1969 and then revived in 1974-75 for one year only. Since there were too many demands for stepping up the MSP, in 1975-76, the present system was evolved in which only one set of prices was announced for paddy (and other kharif crops) and wheat being procured for buffer stock operations.
In formulating the recommendations in respect of the level of minimum support prices and other non-price measures, the Commission takes into account, apart from a comprehensive view of the entire structure of the economy of a particular commodity or group of commodities, the following factors:-
The Commission makes use of both micro-level data and aggregates at the level of district, state and the country. The information/data used by the Commission, inter-alia include the following :-
The increase in MSP for Kharif Crops is in line with the Union Budget 2018-19 announcement of fixing the MSPs at a level of at least 1.5 times of the All-India weighted average Cost of Production (CoP), aiming at reasonably fair remuneration for the farmers.
Source : Farmer Portal
The pricing of sugarcane is governed by the statutory provisions of the Sugarcane (Control) Order, 1966 issued under the Essential Commodities Act (ECA), 1955. Prior to 2009-10 sugar season, the Central Government was fixing the Statutory Minimum Price (SMP) of sugarcane and farmers were entitled to share profits of a sugar mill on 50:50 basis. As this sharing of profits remained virtually unimplemented, the Sugarcane (Control) Order, 1966 was amended in October, 2009 and the concept of SMP was replaced by the Fair and Remunerative Price (FRP) of sugarcane. A new clause ‘reasonable margins for growers of sugarcane on account of risk and profits’ was inserted as an additional factor for working out FRP and this was made effective from the 2009-10 sugar season. Accordingly, the CACP is required to pay due regard to the statutory factors listed in the Control Order, which are
Government announces minimum support prices (MSPs) for 22 mandated crops and fair and remunerative price (FRP) for sugarcane. The mandated crops are 14 crops of the kharif season, 6 rabi crops and two other commercial crops. In addition, the MSPs of toria and de-husked coconut are fixed on the basis of the MSPs of rapeseed/mustard and copra, respectively. The list of crops are as follows.
Sowing season in India of crops varies from state to state and the harvesting of the crop also depends on variety. Thus a harvested crop sown in kharif may reach in the market even before October. MSP of Kharif Crops for 2023-24 is applicable from 1 September 2023. MSP for all mandated Rabi crops is for Rabi Marketing Season (RMS) 2024-25.
The increase in MSP for Kharif Crops for Marketing Season 2024-25 is in line with the Union Budget 2018-19 announcement of fixing the MSP at a level of at least 1.5 times of the All-India weighted average Cost of Production, aiming at reasonably fair remuneration for the farmers. The expected margin to farmers over their cost of production are estimated to be highest in case of bajra (77%) followed by tur (59%), maize (54%) and urad (52%). For rest of the crops, margin to farmers over their cost of production is estimated to be at 50%.
Government has increased the MSP of Rabi Crops for Marketing Season 2024-25, to ensure remunerative prices to the growers for their produce. The absolute highest increase in MSP has been approved for lentil (masur) at Rs.425 per quintal followed by rapeseed & mustard at Rs.200 per quintal. For wheat and safflower, an increase of Rs.150 per quintal each has been approved. For barley and gram an increase of Rs.115 per quintal and Rs.105 per quintal respectively, has been approved.
Commodity |
Variety |
MSP for 2023-2024 (Rs per quintal) |
MSP for 2024-2025 (Rs per quintal) |
Increase over previous year (Rs per quintal) |
KHARIF CROPS |
||||
Paddy |
Common |
2183 |
2300 |
117 |
|
Grade 'A' |
2203 | 2320 |
117 |
Jowar |
Hybrid |
3180 | 3371 |
191 |
|
Maldandi |
3225 |
3421 |
196 |
Bajra |
|
2500 |
2625 | 125 |
Maize |
|
2090 |
2225 | 135 |
Ragi |
|
3846 |
4290 |
444 |
Arhar (Tur) |
|
7000 |
7550 | 550 |
Moong |
|
8558 | 8682 |
124 |
Urad |
|
6950 |
7400 |
450 |
Cotton |
Medium Staple* |
6620 | 7121 | 501 |
|
Long Staple ** |
7020 |
7521 |
501 |
Groundnut in shell |
|
6377 |
6783 |
406 |
Sunflower seed |
|
6760 | 7280 | 520 |
Soyabeen |
Yellow | 4600 | 4892 | 292 |
Sesamum |
- |
8635 | 9267 | 632 |
Nigerseed |
- |
7734 | 8717 | 983 |
RABI CROPS (Rabi Marketing Season (RMS) 2024-25) |
||||
Wheat |
|
2125 | 2275 |
150 |
Barley |
|
1735 | 1850 | 115 |
Gram |
|
5335 |
5440 |
105 |
Masur (Lentil) |
|
6000 | 6425 |
425 |
Rapeseed & Mustard |
|
5450 |
5650 | 200 |
Safflower |
|
5650 |
5800 | 150 |
Toria |
|
5050 |
5450 |
400 |
OTHER CROPS |
||||
Copra (2024 crop season) |
Milling |
10,860 |
11,160 |
300 |
|
Ball |
11,750 |
12,000 |
250 |
De-husked coconut (2024 crop season) |
|
2930 | 3013 |
83 |
Raw Jute - TDN-3 equivalent to earlier TD-5 grade (for 2024 -25 season) |
|
5050 |
5335 |
285 |
Sugarcane $ (for the sugar season 2024-25) |
|
340 |
- |
|
* Staple length (mm) of 24.5 -25.5 and Micronaire value of 4.3 -5.1 |
||||
** Staple length (mm) of 29.5 -30.5 and Micronaire value of 3.5 -4.3 |
||||
$ Fair and remunerative price |
The Fair and Remunerative Price (FRP) of sugarcane payable by sugar mills for 2024-25 sugar season (October-September) is as follows:
Sources : Farmer Portal, Union Budget Portal, Arthapedia
निमणे सुदारीत : 6/24/2024
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