Lok Sabha Question No. 2945 (UNSTARRED), answered on 2026-03-10
Subject: Fixation of MSP
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Smt. Delkar Kalaben Mohanbhai, Shri Gyaneshwar Patil

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE AND FARMERS WELFARE

## LOK SABHA UNSTARRED QUESTION NO. 2945

TO BE ANSWERED ON THE 10 th  MARCH, 2026

## FIXATION OF MSP

2945.SHRI GYANESHWAR PATIL: SMT. DELKAR KALABEN MOHANBHAI:

Will the Minister of AGRICULTURE AND FARMERS WELFARE क ृ िष एवं िकसान कʞाण मंũी be pleased to state:

(a)  whether  the  Government,  keeping  in  view  the  rising  input  cost  of  wages,  fertilizer, energy. irrigation and credit in the country, if so, the details thereof:

(b)  whether  the  Government  has  reviewed  the  widening  gap  between  the  Minimum Support Price (MSP) announced and the actual comprehensive cost of farming (C2) borne by farmers across the country, if so, the details thereof;

(c) whether the MSP is being fixed less than the C2+50 per cent formula recommended by the Swaminathan Commission, if so, the details thereof,

(d)  whether  such  deviation  undermines  the  objective  as  envisaged  under  the  directive principles  for  ensuring  remunerative  pricing  and  income  security  for  farmers,  if  so,  the details thereof; and

(e) whether the Government is formulating any plan to take measures to make MSP more accurately compatible with the actual economic cost of farming across the country, if so, the details thereof?

## ANSWER

MINISTER OF STATE FOR AGRICULTURE AND FARMERS WELFARE क ृ िष एवं िकसान कʞाण राǛमंũी (SHRI BHAGIRATH CHOUDHARY)

(a) to (e): Every year, Government fixes Minimum Support Prices (MSPs) for 22 mandated agricultural  crops  for  the  country  as  a  whole,  based  on  the  recommendations  of  the Commission  for  Agricultural  Costs  &  Prices  (CACP),  after  considering  the  views  of  the State Governments and Central Ministries/Departments concerned.

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.

Within the cost of production, CACP considers all costs in a comprehensive manner which include all paid out costs such as those incurred on account of hired human labour, bullock labour/machine labour, rent paid for leased in land, expenses incurred on use of material inputs like seeds, fertilizers, manures,  irrigation charges, depreciation on implements and farm buildings, interest on working capital, diesel/electricity for operation of  pump  sets  etc.,  miscellaneous  expenses  and  imputed  value  of  family  labour.Further, The cost formula used for calculating MSP is uniform for all 22 mandated crops and states.

National  Commission  on  Farmers  (NCF),  constituted  under  the  Chairmanship  of Prof.  M.S.  Swaminathan  in  2004,  inter  alia,  recommended  that  Minimum  Support  Price (MSP) should be at least 50 percent more than the weighted average cost of production. To give effect to this recommendation, Government, in its Union Budget for 2018-19, had made an announcement to keep MSP at a level of minimum one and half times of the cost of production as a pre-determined principle. Accordingly, MSPs  for  all  mandated Kharif,Rabi  and  other  commercial  crops  have  been  fixed  with  a  margin  of  at  least  50 percent over weighted average cost of production.

Increased MSP has benefited farmers of the country 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 2024-25 are given as under:

| Total Procurement (In LMT)   |   Total MSP Value (In Lakh Crore) |
|------------------------------|-----------------------------------|
| 1,175                        |                              3.33 |

*******