Rabi MSP for 2027-28: Why Farmers' Groups Want the C2+50% Formula
On 30 September 2026, the Union Cabinet approved Minimum Support Prices (MSPs) for six rabi (winter-sown) crops for the 2027-28 marketing season. Wheat MSP was raised by ₹25 to ₹2,610 per quintal (1 quintal = 100 kg).
The government said wheat gives farmers the highest margin over cost of production, 106%, measured on the A2+FL cost.
The Samyukta Kisan Morcha (SKM), a platform of farmers' unions, rejected the new MSPs. It pointed out that the wheat increase works out to only 25 paise per kg, and called for protests in villages, including burning copies of the MSP order.
SKM argued that MSP should be fixed on the fuller C2 cost, which also counts rent of the farmer's own land and interest on own capital. On this basis, it said the wheat margin is about 43%, not 106%, and demanded a wheat MSP of ₹3,418 per quintal.
SKM also said state governments' price suggestions were ignored, that only about a quarter of the wheat crop was procured in 2025-26, and demanded a legal guarantee for MSP at C2+50%.
Minimum Support Price (MSP) Mechanism
The MSP is a price the central government announces for certain crops before sowing. It promises that government agencies will buy these crops at that price if farmers want to sell, so that market prices falling too low do not ruin farmers. MSP is recommended by the Commission for Agricultural Costs and Prices (CACP) and approved by the Cabinet Committee on Economic Affairs (CCEA). MSP is a policy decision, not a legal right: no law today forces traders or the government to buy at MSP.
The new rabi MSPs follow the standard process: CACP recommends and the Cabinet approves. The dispute is not about the process but about which cost the price should be based on, and whether procurement actually reaches most farmers.
Cost of Cultivation Concepts: A2, A2+FL and C2
When the government fixes a crop's MSP, it first works out how much it costs a farmer to grow that crop. But "cost" can be measured in different ways. India uses a ladder of cost concepts (named A1, A2, B1, B2, C1, C2 and so on). Each step up the ladder adds more items. The three that matter most in the MSP debate are A2, A2+FL and C2. The lower the cost used, the bigger the "profit margin" looks on paper.
The government says wheat MSP of ₹2,610 gives a 106% return over A2+FL cost. Farmers' groups say this looks large only because A2+FL leaves out land rent and interest. Using C2, SKM says the margin falls to about 43%, which is why it wants MSP fixed at C2+50% by law.
- Rabi MSP 2027-28 approved by the Union Cabinet on 30 September 2026; total estimated payout about ₹90,962 crore (as reported)
- Wheat MSP: ₹2,610 per quintal (up ₹25 from ₹2,585)
- Highest absolute increase: safflower (₹675 per quintal)
- Government's claimed margin over A2+FL: wheat 106% (highest), safflower 50% (lowest)
- SKM's figures: wheat C2 cost ₹2,279 (as SKM corrected it); C2+50% demand ₹3,418 per quintal
- Budget 2018-19: MSP at least 1.5 times A2+FL cost
- Farm laws repealed in 2021; government letter to SKM on 9 December 2021 promised a committee on MSP