Rabi MSP for 2027-28: Why a Farmers' Body Rejected It, and the C2 Cost Debate Explained
On 30 September 2026, the Cabinet Committee on Economic Affairs (CCEA) raised the Minimum Support Price (MSP) of all six rabi (winter) crops for the Rabi Marketing Season 2027-28.
Wheat got the smallest rise: ₹25 a quintal, from ₹2,585 to ₹2,610 (a quintal is 100 kg, so this is 25 paise per kg). Safflower got the biggest rise: ₹675, to ₹7,215.
The government said the new MSPs give farmers a margin of 50% to 106% over the cost of production. Wheat has the highest margin (106%) and safflower the lowest (50%). These margins are measured over the "A2+FL" cost.
The Samyukt Kisan Morcha (SKM), an umbrella group of about 500 farmers' organisations, rejected the MSPs on 4 October 2026. It argued that the real full cost is "C2", and that on C2 the wheat margin is only about 43%. It said no rabi crop gets C2 plus 50%.
The SKM demanded a legal guarantee of MSP at C2 plus 50%, with immediate revision (for example, wheat at ₹3,418 and mustard at ₹8,684 per quintal). It also demanded freedom for states to pay a bonus over MSP.
The SKM pointed out that in January 2026 the Union Finance Ministry asked states to consider ending bonuses on wheat and paddy, and that the Commission for Agricultural Costs and Prices (CACP) says such bonuses distort the market. The SKM linked this to the charge, raised by the United States at the World Trade Organization (WTO), that India's farm price support is too high.
Minimum Support Price (MSP) Mechanism
The MSP is a price the government announces before sowing and promises to pay farmers for certain crops, even if the market price falls lower. It works like a safety net under the farmer's price. The Commission for Agricultural Costs and Prices (CACP) recommends the MSP, and the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister, takes the final decision. The government's own agencies, such as the Food Corporation of India, actually buy at MSP mainly for wheat and rice.
The new rabi MSPs follow the "1.5 times cost" rule on paper. The farmers' body's complaint is not that the rule was broken, but that the cost used to apply the rule is too low and that MSP is still only a promise, not a legal right.
Cost of Cultivation Concepts: A2, A2+FL and C2
The government measures a farmer's cost of growing a crop at three levels, like the steps of a ladder. A2 is the cash the farmer actually pays out (seeds, fertiliser, hired labour, diesel, rent on leased land). A2+FL adds the value of unpaid family labour. C2 is the most complete cost: it adds the rent the farmer's own land could have earned and the interest the farmer's own money could have earned.
The whole dispute about the 2027-28 MSP is a dispute about which step of this cost ladder to use. Using A2+FL, wheat looks highly profitable; using C2, the farmers' body says no rabi crop reaches the Swaminathan level of C2 plus 50%.
WTO Agreement on Agriculture (AoA)
The Agreement on Agriculture, or AoA, is the World Trade Organization's rulebook for farm trade. It limits how much countries can protect their farmers through import taxes, through subsidies paid at home, and through subsidies paid to push exports. Its aim is to stop rich and big countries from using huge subsidies to flood world markets with cheap food and hurt farmers elsewhere. Every WTO member, including India, has to follow it.
The farmers' body said the advice to states to stop paying bonuses over MSP echoes the charge made against India at the WTO. Under the AoA, MSP and state bonuses count as Amber Box price support, measured against the old 1986-88 reference price, and the US counter-notification specifically criticised the exclusion of state bonuses. This shows how a domestic MSP decision is also tied to India's international trade obligations.
- Rabi MSP 2027-28 approved by the CCEA on 30 September 2026
- Wheat MSP: ₹2,610 per quintal (up ₹25 from ₹2,585); margin over A2+FL cost: 106%
- Safflower: ₹7,215 (up ₹675, the highest rise); margin: 50% (the lowest)
- Rapeseed and mustard: ₹6,613 (up ₹413); lentil: ₹7,390 (up ₹390); barley: ₹2,286 (up ₹136); gram: ₹5,958 (up ₹83)
- MSP rule since 2018-19: at least 1.5 times the all-India weighted average cost of production
- Farmers' body demand: C2 + 50%, with wheat at least ₹3,418 per quintal; it says the wheat margin over C2 is about 43%
- 22 mandated MSP crops: 14 kharif, 6 rabi, 2 commercial
- WTO de minimis limit for India: 10% of the value of production