Source: PIB
Context: The Indian government has recently approved an increase in the Minimum Support Prices (MSP) for six Rabi crops for the 2025-26 marketing season.
- Recent revision in MSP for Rabi crops: Wheat, Rapeseed & Mustard, Lentil (Masur), Barley, Gram, and Safflower.
About Minimum Support Price:
- Definition: MSP is the guaranteed price paid to farmers for their produce when purchased by the government, ensuring they receive a minimum income.
- Determination: MSP is recommended by the Commission for Agricultural Costs and Prices (CACP) based on factors like cost of production, demand and supply, and market trends.
- Approval process: The final decision on MSP is made by the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister.
- Crops under MSP: MSP is announced for 22 crops, including 14 Kharif, 6 Rabi, and 2 commercial crops. Fair Remunerative Price (FRP) is set for sugarcane.
- Types of Production Costs:
CACP uses three cost projections:
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- A2: Paid-out costs for inputs like seeds, labor, and fertilizers.
- A2+FL: Includes unpaid family labor.
- C2: Comprehensive cost including rent and capital interest, used as a benchmark reference.
- Budget 2018-19:
The MSP is set at 1.5 times the All-India weighted average cost of production, ensuring farmers receive fair returns for their produce.
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