Minimum Support Price (MSP) and CACP
The MSP is the minimum price announced by the government at which it will procure select crops from farmers, providing a price floor that insulates them from market volatility. The Commission for Agricultural Costs and Prices (CACP) — constituted in 1985 as a reconstitution of the Agricultural Prices Commission — recommends MSPs based on cost-of-production data. Its recommendation is approved by the Cabinet Committee on Economic Affairs (CCEA).
- CACP calculates three cost measures: A2 (actual paid-out costs), A2+FL (paid-out costs plus imputed family labour value), and C2 (comprehensive cost including land rental value).
- Government policy commits to setting MSP at 1.5 times A2+FL cost.
- Procurement at MSP is carried out by agencies such as the Food Corporation of India (FCI) for paddy and NAFED for oilseeds and pulses.
- MSP is announced before each sowing season; it is a price signal, not a legal guarantee of purchase for all farmers.
● Tracked since May 17, 2026 · last seen August 25, 2026 · updates as the daily brief publishes
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