Centre approves MSP hikes for rabi crops for marketing season 2025-26

Support price of wheat increased by nearly 7 per cent and fixed at Rs 2,425 per quintal

The Union Cabinet on Wednesday raised the Minimum Support Prices (MSP) for key rabi crops for the 2025-26 marketing season starting from April by 2.4-7 per cent.

The support price of wheat has been hiked by 6.59 per cent and fixed at Rs 2,425 per quintal from Rs 2,275 per quintal in the marketing season 2024-25.

The hikes might not have a big inflationary impact. According to an analysis done by the Bank of Baroda, the overall inflationary impact of MSP hikes on wheat, chana, mustard, and masur would be lower at around 0.18-0.20 per cent over a year.

Wheat is the largest food grain grown during the rabi season and it is for the second time in almost a decade that MSPs have been raised by nearly 7 per cent. In the 2024-25 marketing year, the hike was around 7.06 per cent.

The hikes have come as the Central Pool procurement of wheat has struggled to meet the target for the second straight year in the 2024-25 marketing season.

The target could not be reached as farmers preferred to sell their wheat to private players outside the official procurement mechanism who offered them a better price.

Wheat stocks in the Central Pool as of September 1, 2024 were estimated to be around 24.14 million tonnes, lower than last year’s 26 million tonnes but better than the corresponding 2022 level of 24.82 million tonnes.

The previous best hikes in wheat MSP before the current block of 2024-25 and 2025-26 marketing years were in 2018-19 when it was increased by 6.7 per cent.

The highest increase in MSP for the 2025-26 season was reserved for barley at 7.03 per cent at Rs 1980 per quintal.

Among other crops, the MSP of mustard has been raised by 5.31 per cent to Rs 5950 per quintal while that of lentil (masur) by 4.28 per cent to Rs 6,700 per quintal.

The MSP of the gram, which is the largest pulses crop grown in India, has been raised by 3.86 per cent to Rs 5650 per quintal. The MSP of safflower was raised by 2.41 per cent at Rs 5,940 per quintal.

The announcement also comes as Maharashtra, Jharkhand, and New Delhi prepare for elections.

However, minister Ashwini Vaishnaw at a media briefing after the cabinet dismissed any connection between the MSP hikes and the upcoming polls, saying such announcements are typically made around this time.

The minister asserted that farmers have a "good feeling" towards the government, citing transformative changes in their lives.

The MSP increases align with the 2018-19 Union Budget commitment to set support prices at least 1.5 times the all-India weighted average cost of production.

The government expects these hikes to ensure remunerative prices for farmers and encourage crop diversification.

Centre to bear transportation cost of perishables, says Chouhan

Agriculture Minister Shivraj Singh Chouhan on Wednesday said the Centre has decided to bear the transportation cost of perishable commodities such as vegetables to help farmers ferry their produce to the cities and sell them without any trouble.

This, along with the inclusion of vegetables in the Price Deficiency Payment Scheme (similar to Bhawantar Bhugtan Yojana), will ensure that farmers get the best price for their produce.

He also welcomed the Cabinet decision to raise the MSP of main rabi crops and said the government will purchase the entire 100 per cent arhar, masur and urad from farmers.