Minimum Support Price (MSP)
Mechanism and Legal Status
The Minimum Support Price is a price floor announced by the Government of India for select agricultural commodities before the sowing season, intended to protect farmers from price crashes at harvest time. It is an administered price, not a legally guaranteed price — there is no statutory obligation on private buyers to purchase at MSP, though government agencies undertake procurement at MSP.
CACP (Commission for Agricultural Costs and Prices) recommends MSPs for 23 commodities annually: 7 cereals, 5 pulses, 7 oilseeds, and 4 commercial crops (copra, sugarcane, cotton, and raw jute). The final decision rests with the CCEA.
- CACP established: January 1965; attached office under Ministry of Agriculture and Farmers Welfare
- CACP composition: Chairman, Member Secretary, 1 Official Member, 2 Non-Official Members (farming community representatives)
- CACP recommends MSPs based on: cost of production (A2, A2+FL, C2), demand-supply situation, domestic/international prices, inter-crop price parity, terms of trade (agriculture vs non-agriculture)
- C2 cost formula: A2 (actual paid-out costs) + FL (imputed family labour value) + imputed rental value of owned land + interest on fixed capital — the most comprehensive cost measure
- Government's commitment: MSP at least 1.5 times the C2 cost (50% return over C2) — formalised as policy in 2018–19
- Raw jute MSP for 2026–27: ₹5,925/quintal → return of 61.8% over all-India weighted average cost — well above the 50% threshold
- Raw jute is a kharif commercial crop; its MSP is announced separately by CCEA
● Tracked since February 15, 2026 · last seen August 09, 2026 · updates as the daily brief publishes
Plus 6 earlier mentions since February 15, 2026.