The Cabinet Committee on Economic Affairs has approved increased Minimum Support Prices (MSP) for all mandated rabi crops for the 2027-28 marketing season. The decision, made to ensure farmers receive remunerative returns on their produce, includes significant price hikes across pulses, oilseeds and cereals.
Key facts
- Safflower receives the highest absolute increase of Rs. 675 per quintal, followed by Rapeseed & Mustard at Rs. 413 per quintal
- Lentil (Masur) MSP rises by Rs. 390 per quintal to Rs. 7,390 per quintal
- Barley increases by Rs. 136 per quintal to Rs. 2,286 per quintal
- Gram MSP goes up by Rs. 83 per quintal to Rs. 5,958 per quintal
- Wheat sees a modest increase of Rs. 25 per quintal to Rs. 2,610 per quintal
- All price increases maintain a margin over the cost of production ranging from 50 percent (safflower) to 106 percent (wheat)
- The increases follow the 2018-19 Budget announcement to fix MSP at least 1.5 times the all-India weighted average cost of production
Understanding the price structure
The MSP is a floor price at which the government guarantees to purchase crops from farmers if market prices fall below this level. For rabi crops, which are sown in winter and harvested in spring, the government has set prices that cover production costs and provide a reasonable profit margin.
The cost of production used in these calculations includes all expenses farmers incur, such as labour wages, fertilisers, seeds, water charges, rental costs for leased land, depreciation of tools and machinery, and electricity. The difference between MSP and this cost represents the farmer’s margin or profit.
Why pulses and oilseeds receive higher increases
Safflower and rapeseed & mustard, both oilseed crops, attract the largest price increases. Lentil and other pulses also see substantial hikes. This reflects government policy to encourage farmers to diversify away from cereals towards pulses and oilseeds, which are important for food security and rural incomes. Pulses provide protein in the Indian diet, while oilseeds meet domestic cooking oil demand. By offering higher MSP for these crops relative to wheat, the government aims to incentivise their cultivation.
Protection for farmer income
The MSP guarantees that even if market prices crash due to oversupply, farmers can sell their produce to government procurement agencies at the announced price. This protection is particularly valuable during harvest season when market arrivals surge and prices typically fall.
Wheat maintains the smallest absolute increase because it has been procured in large volumes for years and already forms a major part of the public distribution system. In contrast, pulses like lentil face supply constraints and higher volatility, justifying larger price incentives to boost production.
Scale of government support
Data from recent years shows the impact of MSP policy. Between 2014-15 and 2025-26, government procurement of wheat doubled to 3,715 lakh metric tonnes compared to the previous decade. Similarly, procurement of the six mandated rabi crops almost doubled to 3,921 lakh metric tonnes. The amount of money paid to farmers through MSP more than doubled for both wheat and pulses crops combined during this period.
What this means for you
If you are a rabi crop farmer, these price increases mean higher guaranteed returns for your harvest in 2027-28, provided you sell through government procurement channels. This is particularly beneficial if you grow pulses or oilseeds, which see steeper hikes. The prices cover your production costs with a healthy margin, reducing financial risk.
For consumers, stable MSP policy supports domestic production of pulses and oils, potentially moderating food inflation and reducing import dependence over time. However, immediate retail prices may not fall if supply remains tight.
For policymakers and agricultural economists, these decisions reflect a commitment to support farm incomes while promoting crop diversification and self-sufficiency in essential food items.