Reference:

• On 27th March 2025, Union Agriculture Minister Shivraj Singh Chouhan urged all state governments to ensure that farmers receive Minimum Support Price (MSP) for their produce and that no procurement happens below MSP to enhance farmers' income.
• He announced that 100% procurement of tur (arhar), urad, and masoor at MSP will continue for the next four years (till 2028-29).

Key Highlights

1. Minimum Support Price (MSP)

• Definition: The minimum price at which the government purchases crops from farmers.
• Introduced in: 1966-67 (first for wheat, later expanded to other essential food crops).

2. Major Announcements & Provisions

• Focus on Pulses & Oilseeds:
• 100% procurement at MSP for tur (arhar), urad, masoor, chana, and mustard.
• Timeline: Policy to continue till 2028-29.
• State Participation:
• Procurement initiated via NAFED & NCCF in states like Andhra Pradesh, Gujarat, Maharashtra, Telangana, and Karnataka.
• Procurement Targets:
• Rabi Season 2025: 37.39 LMT chana & masoor and 28.28 LMT mustard approved.
• Kharif Season: 13.22 LMT tur (arhar) targeted.

3. Expectations from States

• Transparency: States must ensure fair procurement at MSP and prevent underpayments.
• Digital Platforms: Farmers encouraged to register on NAFED’s e-Samridhi and NCCF’s e-Sanyukti portals.
• Extended Procurement Window: In Karnataka, procurement period extended from 90 days to 1st May 2025.

MSP Determination Process

1. Role of CACP (Commission for Agricultural Costs & Prices)

• An advisory body under the Ministry of Agriculture & Farmers’ Welfare.
• Recommends MSP based on:
• Production costs (A2, A2+FL, C2)
• Demand-supply dynamics
• Domestic & international market trends
• Consumer Price Index (CPI)

2. Cost Components Considered

• A2: Direct costs (seeds, fertilizers, labor, leased land, irrigation, etc.).
• A2+FL: A2 + imputed value of unpaid family labor.
• C2: A2+FL + land rent & fixed capital interest.

3. Cabinet Approval

• CCEA (Cabinet Committee on Economic Affairs) takes the final decision on MSP.
• Crops Covered Under MSP
• Currently, 23 crops are covered under MSP:
• Cereals (7): Jowar, Bajra, Paddy, Maize, Wheat, Barley, Ragi
• Pulses (5): Moong, Arhar (Tur), Chana, Urad, Masoor
• Oilseeds (7): Soybean, Safflower, Groundnut, Mustard, Sesame, Sunflower, Niger Seed
• Commercial Crops (3): Cotton, Copra, Raw Jute
• Sugarcane: FRP (Fair & Remunerative Price) instead of MSP.

Fair & Remunerative Price (FRP) for Sugarcane

• Definition: Legally mandated minimum price paid by sugar mills to sugarcane farmers.
• Governed by: Sugarcane (Control) Order, 1966.
• FRP Determination Process
• CACP Recommendations: Based on:
• Cost of sugarcane production
• Sugar recovery rate
• Market prices of sugar & by-products
• Reasonable farmer profits