Minimum Support Price (MSP)
Context: The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi on Wednesday approved the increase in the Minimum Support Price (MSP) for 14 kharif crops for 2025-26. The total outlay is nearly ₹2.07 lakh crore.
Important Pointers:
Definition: MSP is the minimum rate at which the government purchases crops from farmers to protect them from price fluctuations.
Purpose: It ensures farmers receive remunerative prices and protects them from distress sales.
Introduced: MSP was first introduced in 1966–67 for wheat during the Green Revolution.
Recommended by: The Commission for Agricultural Costs and Prices (CACP) recommends MSPs to the government.
Announced by: Final approval is given by the Cabinet Committee on Economic Affairs (CCEA).
Crops Covered: MSP is announced for 22 crops—14 Kharif, 6 Rabi, and 2 commercial (copra and jute).
MSP Formula (2018-19): As per the Union Budget 2018-19, MSP is fixed at least 1.5 times the all-India weighted average cost of production.
Swaminathan Commission: Recommended MSP to be 50% above the comprehensive cost (C2 + 50%).
Kharif 2025-26 Update: MSP hiked for 14 kharif crops with a total outlay of ₹2.07 lakh crore.