Minimum Support Price (MSP), Meaning, Crops List 2025-26

The Minimum Support Price (MSP) is a market intervention scheme where the government sets a predetermined price for 22 crops. If market prices drop below the MSP, the government steps in to purchase the crops. This ensures that farmers receive a guaranteed price, protecting them from market fluctuations and ensuring financial stability. Keep reading the article to know the details of MSP, the List of Crops Covered Under MSP and many more.

What is Minimum Support Price (MSP)?

The Minimum Support Price (MSP) is the minimum price set by the government to ensure farmers receive fair value for their crops, even when market prices fall. This concept was introduced in 1966-67 during the Green Revolution as part of agricultural reforms, MSP serves as a safety measure taken by the union government to protect farmers from financial losses and maintain food security.

The Indian government announces MSP twice a year, before the Kharif (monsoon) and Rabi (winter) sowing seasons. The Commission for Agricultural Costs and Prices (CACP) recommends the MSP, which is then approved by the Cabinet Committee on Economic Affairs (CCEA). This system encourages farmers to grow essential crops while ensuring financial stability.

Minimum Support Price Crops List

The government sets the Minimum Support Price (MSP) for 22 crops to provide financial support to farmers. This includes 14 Kharif crops, Rabi crops 6, and 2 commercial crops. MSP is also determined for Toria and de-husked coconut, based on the MSPs of rapeseed & mustard and copra. The MSP is revised annually by the government, considering the existing economic and agricultural conditions to ensure fair price for the crop to the farmers.

Kharif Crops

1. Paddy
2. Jowar
3. Bajra
4. Ragi
5. Maize
6. Tur (Arhar)
7. Moong
8. Urad
9. Groundnut
10. Sunflower Seed
11. Soyabean (Yellow)
12. Sesamum
13. Nigerseed
14. Cotton

Rabi Crops

1. Wheat
2. Barley
3. Gram
4. Masur (Lentil)
5. Rapeseed & Mustard
6. Safflower

Commercial Crops

1. Copra
2. Jute

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How to Determine Minimum Support Price?

The Commission for Agricultural Costs and Prices (CACP) recommends the Minimum Support Price (MSP) based on various factors, ensuring fair prices for crops to farmers. Before announcing the MSP, the government considers:

• Cost of Production: The primary factor includes expenses on seeds, fertilizers, irrigation, and labour. Farmers are assured a minimum margin of 50% over the production cost.
• Demand and Supply: The government analyzes market trends and consumer demand to determine appropriate pricing.
• Market Price Trends: Domestic and international price comparisons ensure that the MSP remains competitive.
• Inter-Crop Price Parity: A balanced pricing structure across different crops encourages diversified farming.
• Terms of Trade: The government assesses the relationship between agricultural and non-agricultural sectors to maintain fair trade conditions.

Also Read: Fertilizer Security

Other Considerations

• Changes in Input Prices
• Input-Output Price Parity
• Industrial Cost Structure
• Cost of Living
• Impact on Subsidies
• Farmer’s Income Parity

The government uses the A2+FL formula to calculate MSP, which includes:

• A2: Actual paid-out costs incurred by the farmer.
• FL: The imputed value of family labour.

Minimum Support Price Needs

The Minimum Support Price (MSP) is a minimum price set by the government of India for Indian agriculture, offering stability, security, and motivation for farmers to sustain crop production. The below mentioned are the needs for the Minimum Support Price:

• It guarantees a minimum income for farmers, protecting them from financial losses.
• By providing assured prices, it motivates farmers to grow more staple crops, contributing to food security.
• MSP acts as a buffer against price fluctuations, especially during harvest season.
• A strong agricultural sector, backed by MSP, uplifts rural livelihoods and strengthens the economy.
• Farmers are protected from being forced to sell their produce at unfair prices by traders.

Latest Minimum Support Price 2025-26

According to the Directorate of Economics and Statistics, Ministry of Agriculture and Farmers Welfare, according to the latest Minimum Support Price (MSP) applicable for the 2025-26 is as follows (as of 22 January 2025):