MSP (Minimum Support Price)

What is MSP?

MSP is short for Minimum Support Price. It is set by the Indian government for selected crops to ensure that farmers are able to make profit with them. It is based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). Currently 23 crops are affected, which make up nearly 90% of India's cultivated area.

The government also offers the farmers procurement of their crops at MSP prices. By this policy the government wants to guarantee farmers a remunerative business. Still, they are free to sell their products also at the open market.

There are two ways to implement MSP. Either the state or central government procures commodities in a physical way or the farmers get a cash payment for the difference between the MSP and the money they got for their crops.

What are the current MSPs in 2021?

This table shows MSPs of the past and present fixed by the Indian government.

MSP calculation

The CACP calculates the prices based on a bunch of factors summed up in three definitions A2, A2+FL and C2. A2 includes the costs farmers have to incur on seeds, fertilizer, staff and other actual paid-out expenses. A2+FL also considers an imputed value of unpaid working family members. C2 covers A2+FL and adds rental value of owned rent and fixed capital assets.

CACP claims that the MSP will be set at levels of one and a half times the production costs. For this calculation only A2+FL costs are used. C2 costs serve as benchmark reference costs, by which the committee wants to see if at least in the main producing states these costs can be covered with the recommended MSP.

List of MSP calculation factors:

• demand
• supply
• price trends & price fluctuations
• production cost
• different costs and international market prices
• agricultural wage rate

MSP Crops list

Currently there are 23 different crops, which are fixed by an MSP. These are the following:

• Cereals:
  Paddy, Wheat, Maize, Sorghum, Pearl millet, Barley, Ragi
• Pulses:
  Chickpea / Gram / Gramme, Tur, Moong, Urad, Lentil
• Oilseeds:
  Peanut, Rapeseed, Soyabean, Sesame, Sunflower, Safflower, Niger seed
• Commercial crops:
  Copra, Sugarcane, Cotton, Raw jute

MSP of Wheat 2021

The Minimum Support Price for wheat is currently at Rs. 1,975

Over the last ten years MSP for wheat has been constantly increasing. Although growth has stagnated over the last few years.

MSP Development for Wheat

MSP Wheat News

Here’s what the news say about MSP Wheat:

• Delhi, Modi govt spar as Kejriwal minister says ‘no MSP wheat procurement centre’ set up:
  Article about wheat at https://theprint.in
• Food corporation not procuring wheat at MSP in Delhi, alleges Rai:
  Article about wheat at hindustantimes.com
• From today Haryana government will procure wheat, mustard at MSP:
  Article about wheat at timesofindia.indiatimes.com

MSP Wheat on Youtube

Here’s what Youtubers say about MSP Wheat:

• Va Tech C1 - Rabi Crops MSP 2021-22,Wheat MSP 2021-22 (Hindi)
• MP News - rabi crops msp 2021-22 | wheat msp 2020-21 (Hindi)
• Pankaj Gyan - how to sell wheat, msp (Hindi)

MSP of Paddy 2021

The Minimum Support Price for Paddy is currently at Rs. 1868 (Common) or Rs. 1888 (Grade ‘A’).

During the Karif season in 2019-20 MSP for Paddy (Common) was Rs. 1,815 and Paddy (Grade ‘A’) was Rs. 1,835. Both increased over Rs. 53 in the Karif season 2020-21. With projected costs KMS of Rs. 1,245 the return over cost is 50%.

MSP Development for Paddy

MSP Paddy News

Here’s what the news say about MSP Paddy:

• 14.08 % more paddy procured on MSP in comparison to corresponding period:
  Article about paddy at pib.gov.in
• (Apply Online) WB Kharif Paddy Procurement Scheme 2021: Registration Form:
  Article about paddy at pmmodiyojana.in
• 3-year prison for selling or purchasing wheat and paddy below MSP in Punjab:
  Article about paddy at nationalheraldindia.com

MSP Paddy on Youtube

Here’s what Youtubers say about MSP Paddy:

• Agri Mantra - MSP of 2020-21/Minimum Support Price(2020-21) - Paddy, Maize, Urd, cotton etc. (Hindi)
• Down To Earth - Ground report: Farmers forced to sell paddy at Rs 1200 per quintal in Haryana (Hindi)
• OTV - Govt Announces MSP Hike For 14 Kharif Crops Including Paddy (Odisha)

MSP Links

Helpful links with resources on the Minimum Support Price in India:

• MSP in the Wikipedia:
  https://en.wikipedia.org/wiki/Minimum_support_price_(India)
• CACP, the Commission for Agricultural Costs & Prices:
  https://cacp.dacnet.nic.in/
• Rice price @ Business Insider:
  https://markets.businessinsider.com/commodities/rice-price