MSP raised for 14 kharif crops, 2026-27

The Cabinet Committee on Economic Affairs has cleared the minimum support prices for all 14 mandated kharif crops for marketing season 2026-27, keeping every crop at or above 1.5 times its all-India cost of production.

What happened

• The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister, approved an increase in the Minimum Support Price (MSP) for 14 kharif crops for Marketing Season 2026-27, stated to ensure remunerative prices to growers.
• The largest absolute hike went to Sunflower Seed (+₹622/quintal), followed by Cotton (+₹557), Nigerseed (+₹515) and Sesamum (+₹500).
• Every crop's MSP was fixed at at least 1.5 times the all-India weighted average cost of production, the formula announced in the Union Budget 2018-19.
• The expected margin over cost is highest for Moong (61%), then Bajra (56%), Maize (56%) and Tur/Arhar (54%); the remaining crops carry a 50% margin.
• The pricing is tilted to favour pulses, oilseeds and Nutri-cereals (Shree Anna) through relatively higher support, continuing a stated push for crop diversification away from water-intensive paddy.

Background & context

MSP is the floor price at which government agencies stand ready to buy a notified crop directly from farmers, designed to insure the cultivator against a sharp fall in market prices at harvest. It is announced, not legislated: there is no Act guaranteeing it, and it operates through a recommend-then-approve administrative chain rather than a statutory entitlement. The figures cleared on 13 May 2026 are the kharif (monsoon-sown, autumn-harvested) leg of an exercise the government runs twice a year — kharif prices before the sowing season around May–June, and rabi (winter) prices later in the year.

The price recommendation originates with the Commission for Agricultural Costs and Prices (CACP), an attached office of the Ministry of Agriculture and Farmers Welfare set up in 1965 (then named the Agricultural Prices Commission). CACP studies the cost of cultivation and recommends MSP for the mandated crops; the recommendation travels to the CCEA for the final decision; the price is then operationalised through procuring agencies such as the Food Corporation of India for paddy, NAFED and the National Cooperative Consumers' Federation for pulses and oilseeds under price-support operations, and the Cotton Corporation of India for cotton. The CACP weighs several factors beyond cost — demand and supply, domestic and global price trends, inter-crop price parity, terms of trade between farm and non-farm sectors, and the likely effect on consumers — so MSP is not a pure cost-plus number for every crop.

The "at least 1.5 times the cost of production" rule traces to the Union Budget 2018-19. The cost benchmark used for the 1.5x promise is the A2+FL cost — paid-out expenses (A2: seeds, fertiliser, hired labour, fuel, irrigation, etc.) plus the imputed value of unpaid family labour (FL). This is distinct from the fuller C2 cost, which additionally counts rent on owned land and interest on owned capital; the difference between A2+FL and C2 is the heart of the long-running debate about whether the 1.5x promise reflects the Swaminathan Committee's recommendation, which was framed against C2.

For Prelims

• Full set — 14 kharif crops under MSP: cereals — Paddy, Jowar, Bajra, Ragi, Maize; pulses — Tur/Arhar, Moong, Urad; oilseeds — Groundnut, Sunflower Seed, Soybean (Yellow), Sesamum, Nigerseed; and the lone fibre crop, Cotton. (Knowing the count and the four families survives "how many of these" and "match the category" questions.)
• MSP 2026-27 (₹/quintal): Paddy Common 2441, Grade A 2461; Jowar Hybrid 4023, Maldandi 4073; Bajra 2900; Ragi 5205; Maize 2410; Tur/Arhar 8450; Moong 8780; Urad 8200; Groundnut 7517; Sunflower Seed 8343; Soybean (Yellow) 5708; Sesamum 10346; Nigerseed 10052; Cotton Medium Staple 8267, Long Staple 8667.
• Highest absolute hikes: Sunflower Seed +₹622 · Cotton +₹557 · Nigerseed +₹515 · Sesamum +₹500 per quintal.
• Highest margin over cost: Moong 61% · Bajra 56% · Maize 56% · Tur/Arhar 54%; all other crops at the floor of 50%.
• Cost basis: the 1.5x guarantee is benchmarked on A2+FL cost (paid-out costs plus imputed family labour), not the wider C2 cost that also imputes land rent and capital interest.
• Recommended by: the Commission for Agricultural Costs and Prices (CACP), 1965, an attached office of the Ministry of Agriculture and Farmers Welfare; approved by: the CCEA.
• Procurement scale (release figures): over 2014-15 to 2025-26, paddy procurement was 8418 LMT (against 4590 LMT in 2004-05 to 2013-14) and all-14-kharif-crop procurement 8746 LMT (against 4679 LMT); MSP value paid to paddy growers ₹16.08 lakh crore (against ₹4.44 lakh crore) and to all 14 kharif growers ₹18.99 lakh crore (against ₹4.75 lakh crore).
• Season note: kharif crops are monsoon-sown (June–July) and autumn-harvested (Sept–Oct); paddy, maize, soybean, cotton and tur are leading kharif crops, as against rabi crops such as wheat, gram and mustard sown in winter.
• Where they grow: paddy is led by West Bengal, Uttar Pradesh and Punjab; cotton by Gujarat, Maharashtra and Telangana; groundnut by Gujarat; soybean by Madhya Pradesh and Maharashtra; tur by Maharashtra and Karnataka; bajra by Rajasthan and ragi by Karnataka. The concentration of paddy procurement in Punjab, Haryana and a few other States is the reason MSP's income benefit is unevenly spread.
• Companion instrument: for the crops where central procurement is thin, the price-support and price-deficiency arms of PM-AASHA (Pradhan Mantri Annadata Aay SanraksHan Abhiyan, 2018) are the umbrella under which pulses, oilseeds and copra are bought or compensated at MSP, distinct from the FCI-led paddy operations.

What MSP is — and is NOT

• NOT a legal right. There is no statute that obliges anyone to buy at MSP or penalises a purchase below it; a 2021 push for a law guaranteeing MSP remained a demand, not enacted law. MSP is an administrative price-support instrument.
• NOT a procurement price for all crops. Effective procurement is concentrated in paddy (and wheat in rabi); for several pulses and oilseeds, actual government buying is far smaller than the announced support implies, so the MSP for many crops functions more as a signal than as guaranteed offtake.
• NOT decided by the CACP. The CACP only recommends; the binding decision is the Cabinet's (CCEA). And the 1.5x benchmark is on A2+FL, not on the higher C2 cost.
• NOT the same as the issue price under the PDS. MSP is what the government pays the farmer; the central issue price is the subsidised rate at which grain is sold to ration-card holders. The gap is the food subsidy.

Why it matters

MSP sits at the centre of three policy tensions the announcement quietly manages. First is farmer income versus consumer prices and the fiscal bill: a higher floor protects the grower but raises the cost of public procurement and, indirectly, food subsidy. Second is crop pattern: by giving pulses, oilseeds and millets a relatively higher margin over cost than paddy, the price structure is meant to nudge farmers away from water-intensive paddy in stressed regions toward crops where India still imports heavily, especially edible oils and pulses — addressing both groundwater depletion and an import-dependence problem. Third is regional and crop concentration: because real procurement is heavily skewed toward paddy in a few States, the income benefit of MSP is unevenly distributed, which is the structural critique the diversification tilt is intended to soften.

The "Nutri-cereals/Shree Anna" emphasis connects the price decision to the broader millet push (India led the International Year of Millets in 2023) — coarse cereals such as bajra, ragi and jowar are climate-resilient, need less water, and carry nutritional value, so a relatively better support price for them is consistent with both climate-adaptation and nutrition-security goals.

The kharif decision is best read alongside its rabi twin. The same machinery announces wheat, gram, masur, mustard and barley support prices for the winter season; wheat and paddy together account for the overwhelming majority of actual government procurement, which is precisely why the announced support for the other twelve kharif crops matters more as a market signal than as a guarantee of purchase. The relatively richer margins on moong, bajra and maize this season are the lever the government is using to make those signal crops worth sowing — a slow attempt to rebalance a cropping pattern that decades of assured paddy procurement entrenched. The end-uses of the supported crops span the food economy: paddy and maize feed the staple-grain and feed-and-starch industries, the pulses (tur, moong, urad) are India's principal vegetarian protein, the oilseeds (groundnut, sunflower, soybean, sesamum, nigerseed) feed an edible-oil sector where India imports a large share of its consumption, and cotton anchors the textile value chain — so the price decision reaches well beyond the farm gate into industrial inputs and the household food basket alike.

For Mains