Minimum Support Prices

Published on 22 Mar 2025

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• The Cabinet Committee on Economic Affairs, chaired by the Hon’ble Prime Minister, has approved the increase in the Minimum Support Prices (MSP) for all mandated Rabi Crops for Marketing Season 2024-25.
• Annually, the Government of India announces MSPs for 22 major agricultural commodities.
• This includes 14 Kharif crops, 6 Rabi crops, and 2 commercial crops.
• Jute and copra are two commercial crops that are covered.
• In addition, MSP for Toria and de-husked coconut is also fixed based on MSPs of rapeseed & mustard, and copra, respectively.
• The MSP is fixed based on the recommendations of the Commission for Agricultural Costs & Prices (CACP), an advisory body under the Ministry of Agriculture.
• The Cabinet Committee on Economic Affairs (CCEA) makes the final decision on MSPs after considering the recommendations of CACP.

The Factors Considered to Fix MSP:

 # Cost of production A2 + FL (ie, it covers all Cost of production A2 + FL (ie, it covers all actual expenses (A2) incurred by the farmer plus the imputed cost of family labour (FL).).

# Overall demand-supply situations of various crops in domestic and world markets.

# Domestic and international prices,

# Inter-crop price parity,

# Terms of trade between agriculture and non-agriculture sector (comparison of prices indexes of both),

# Likely effect of price policy on rest of economy and

# A minimum of 50% as the margin over the cost of production.

Keywords:

Minimum support price MSP Agriculture Indian agriculture Agri marketing