This document summarizes a response from the Minister of State for Agriculture and Farmers Welfare to a parliamentary question regarding the criteria used to determine Minimum Support Prices (MSPs) for agricultural crops. The question specifically addresses concerns about marginal increases in MSP for paddy, moong, and tur compared to ragi and jowar, and their potential impact on farmer livelihoods, procurement, and crop planning.
The Minister's response clarifies that the government determines MSPs for 22 mandated crops annually based on recommendations from the Commission for Agricultural Costs and Prices (CACP), following consultations with state governments, central ministries/departments, and various stakeholders including farmers. CACP considers factors such as cost of production, demand-supply, domestic and international prices, inter-crop parity, terms of trade, and resource utilization when recommending MSPs.
The response also highlights the government's commitment, announced in the Union Budget for 2018-19, to maintain MSPs at least 1.5 times the cost of production, a policy implemented since 2018-19. The provided data indicates that total procurement of MSP crops during 2024-25 (July to June) reached 1,175 LMT with a total MSP value of ₹3.33 lakh crore.
Key Entities Referenced
Ministry of Agriculture and Farmers Welfare: The Indian government ministry responsible for agriculture and farmers' welfare.
Lok Sabha: The lower house of the Parliament of India, where the unstarred question was raised.
Minimum Support Prices (MSPs): Government intervention to support farmer income by guaranteeing a minimum price for certain crops.
Commission for Agricultural Costs Prices (CACP): An advisory body that recommends MSPs to the government based on various factors.
Punjab: A state in India where crops like cotton, tur, and moong dominate farmers' livelihoods.
Telangana: A state in India where crops like cotton, tur, and moong dominate farmers' livelihoods.
Maharashtra: A state in India where crops like cotton, tur, and moong dominate farmers' livelihoods.
Madhya Pradesh: A state in India where crops like cotton, tur, and moong dominate farmers' livelihoods.
GOVERNMENT OF INDIA
MINISTRY OF AGRICULTURE AND FARMERS WELFARE
DEPARTMENT OF AGRICULTURE AND FARMERS WELFARE
LOK SABHA
UNSTARRED QUESTION NO. 4235
TO BE ANSWERED ON THE 19TH AUGUST, 2025
CRITERIA TO INCREASE MSP
4235. SHRI RAJA RAM SINGH:
Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ(cid:874)ष और (cid:873)कसान क(cid:227)याण म(cid:287)ं ी
be pleased to state:
(a) whether the Ministry can justify the marginal hike of only 3% in MSP for paddy, and a
mere 1% for moong and 5% for tur, despite long-standing demands by farmers’ unions for a
substantial increase in essential crops;
(b) the criteria used to determine higher MSP increases for ragi (14%) and jowar (10%),
which have a limited cultivation base, while ignoring crops like cotton, tur, and moong that
dominate farmers livelihoods across States like Punjab, Telangana, Maharashtra, and
Madhya Pradesh;
(c) whether the Ministry has assessed the impact of such pricing on procurement, crop
planning, and farmer income stability, if so, the details thereof as well as the stakeholders
on the same; and
(d) whether any consultations were held with farmers before finalising these MSP rates,
and if so, the details of their key demands?
ANSWER
THE MINISTER OF STATE FOR AGRICULTURE AND FARMERS WELFARE
कृ(cid:874)ष एवं (cid:873)कसान क(cid:227)याण रा(cid:207)य म(cid:287)ं ी (SHRI RAMNATH THAKUR)
(a) to (d): Every year, Government fixes Minimum Support Prices (MSPs) for 22
mandated agricultural crops including 14 kharif crops for the country as a whole based on
the recommendations of Commission for Agricultural Costs & Prices (CACP), after
considering the views of State Governments and Central Ministries/Departments
concerned. CACP also holds consultations with various stakeholders including State
governments and farmers’ representatives before finalizing its recommendations on MSP.While recommending MSPs, CACP considers important factors like cost of
production, overall demand-supply conditions, domestic and international prices, inter-crop
price parity, terms of trade between agricultural and non-agricultural sectors, the likely
effect on the rest of the economy, besides ensuring rational utilization of land, water and
other production resources.
The Union Budget for 2018-19 had announced the pre-determined principle to keep
MSPs at levels of at least one and half times of the cost of production. Accordingly,
Government had increased MSPs for all mandated Kharif, Rabi and other Commercial
crops with a minimum return of 50 percent over all India weighted average cost of
production from year 2018-19 onwards.
Increased MSP has benefited farmers which are evident from data of procurement
and MSP amount paid to the farmers. The details of procurement and MSP amount paid to
farmers during current year are given as under:
Procurement & MSP value of MSP Crops during 2024-25 (July to June)
Total Procurement (In LMT) Total MSP Value (In lakh Crore)
1,175 3.33
******