Hike in MSP assures farmers of Rs 84,263 crore for sale of rabi crops in 2026-27

New Delhi, Oct 10 With the increase in minimum support prices (MSP) for various crops announced for the rabi marketing season of 2026-27, farmers are expected to receive Rs 84,263 crore as the government’s procurement is estimated at 297 lakh metric, according to an official statement issued on Friday.

MSP payouts to farmers for the government’s purchase of foodgrains have more than tripled from Rs 1.06 lakh crore in 2014-15 to Rs 3.33 lakh crore in July 2024 - June 2025, while procurement has increased from 761.40 lakh metric tonnes to 1,175 lakh metric tonnes over the same period, benefiting 1.84 crore farmers, the official statement said.

Minimum Support Price (MSP) is a crucial mechanism through which the government supports farmers by purchasing their crops at a pre-determined price. For example, a wheat grower can be assured of Rs 2,585 per quintal for his crop (MSP for 2026-27), even if open-market prices dip. Similarly, a paddy farmer can sell to government agencies at Rs 2,369/quintal (MSP for 2025-26) for common paddy. This assured price encourages farmers to invest in quality seeds and technology without fear of distress sales.

Since 2018-19, the government has been increasing MSPs for all mandated crops in line with the Union Budget 2018-19 announcement for setting up MSP at least 1.5 times the cost of production. This ensures a minimum return of 50 per cent over the all-India weighted average cost of production for all crops.

The Cabinet has approved the increase in the Minimum Support Prices (MSP) for all mandated Rabi Crops for Marketing Season 2026-27 on October 1, 2025. Further, the government has increased the MSP of mandated crops for the Kharif Marketing Season 2025-26 to ensure remunerative prices to the growers for their produce.

For the rabi marketing season 2026–27, margins over cost of production peak at 109 per cent for wheat

For self-sufficiency in pulses, the government has announced 100 per cent production of tur (arhar), urad, and masoor to be procured up to 2028-29; with 2.46 lakh tonnes of tur already procured by March 2025.

Each cropping season, India’s farmers face uncertainties in weather, and markets can wipe out their gains. Unseasonal rains, droughts, or floods can destroy months of hard work in a matter of days. Even when crops are harvested successfully, volatile market prices can push farmers into distress sales, forcing them to sell at rates far below the cost of production. For small and marginal farmers, who depend entirely on agriculture for their livelihood, these risks can mean spiralling debts, loss of income, and even abandonment of farming altogether. This is where the MSP becomes a lifeline, the statement explained.

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