Union Cabinet's Decision on Minimum Support Price (MSP) for Kharif Crops

The Union Cabinet recently announced an increase in the minimum support price (MSP) for kharif crops for the 2025-26 crop year, starting in July.

Key Highlights

• Least Increase for Paddy:
  The smallest MSP hike was for paddy, the main food grain crop of the kharif season.
• Higher MSP Increase for Pulses and Oilseeds:
  This aligns with the Centre's policy to encourage farmers to switch from water-intensive and environmentally-detrimental crops like paddy to pulses and oilseeds.

Analysis of Procurement Practices

• Cereals vs. Pulses and Oilseeds in Procurement:
  Despite MSP increases, procurement mainly focuses on cereals (wheat and paddy), which far exceed that of pulses and oilseeds.
• Procurement as Percentage of Marketable Surplus:
  Cereals are procured more extensively compared to pulses and oilseeds.

Recommendations for Improvement

• Increase Procurement of Pulses and Oilseeds:
  Although procurement at MSP has increased in recent years, further efforts are needed to encourage switching from grains.
• Market-Oriented Input Pricing:
  There is a need for input pricing to be market-oriented, ensuring a level playing field for farmers.