Kharif Crop Prices Rise Above MSP as El Nino Drought and Untimely Rain Cut Production
Market prices of most kharif (monsoon-season) crops are now higher than their Minimum Support Price (MSP), the floor price the government promises farmers.
The main reason is lower production. A drought during the southwest monsoon, caused by El Nino (a warming of the Pacific Ocean that weakens India's monsoon), hurt sowing and crop growth. Untimely rain after the monsoon then damaged crops close to harvest.
The 2026 southwest monsoon ended with rainfall at about 87% of the long-period average, a deficit of about 12.6%. The east and northeast region and the southern peninsula were hit hardest, with deficits of about 25%.
When less grain reaches the market, buyers compete for it and prices rise. So farmers are selling in the open market above MSP, and government procurement at MSP becomes less needed for many crops.
For the 2026-27 marketing season, the MSP of common paddy is ₹2,441 per quintal, maize ₹2,410, tur (arhar) ₹8,450 and yellow soybean ₹5,708.
Minimum Support Price (MSP) Mechanism
The Minimum Support Price, or MSP, is a price the government promises to pay farmers for certain crops, no matter how low the market price falls. It works like a safety net under the farmer. If the market price is above MSP, the farmer simply sells in the market. If it falls below MSP, the farmer can sell to government agencies at MSP, where procurement is available.
In a normal harvest, many kharif crops such as maize and pulses often sell below MSP because supply is high. This year, the drought has cut supply so much that market prices have risen above MSP. This shows that MSP is a floor, not a ceiling: when the market pays more, the floor simply stops being needed.
El Niño–Southern Oscillation (ENSO)
El Niño–Southern Oscillation, or ENSO, is a natural climate swing in the tropical Pacific Ocean. Every few years, the sea surface in the central and eastern Pacific becomes unusually warm (El Niño) or unusually cool (La Niña). These changes shift winds and rainfall across the world. For India, El Niño usually means a weaker southwest monsoon, while La Niña usually means a stronger one.
The El Niño of 2026 weakened the southwest monsoon, which ended about 12.6% below normal. Less rain meant lower kharif yields, and that lower supply is why market prices of most kharif crops have moved above MSP.
Cropping Seasons in India: Kharif, Rabi and Zaid
India grows crops in three main seasons: kharif, rabi and zaid. Kharif crops are sown with the start of the southwest monsoon and harvested in autumn. Rabi crops are sown in winter and harvested in spring. Zaid crops grow in the short summer gap between the two.
The kharif season of 2026 faced two shocks: too little rain during the sowing and growing months, and unseasonal rain near harvest. Both cut output, which is why kharif crop prices are now above their support prices.
India's Drought Classification Framework (Manual for Drought Management)
A drought is a long period when an area gets much less water than it normally does, so that crops, animals and people suffer. In India, the rules for measuring and declaring a drought are set out in the Manual for Drought Management, issued by the Union Ministry of Agriculture and Farmers Welfare. The manual tells state governments which signals to check, how to decide whether a drought is "moderate" or "severe", and how to get relief money. The final decision to declare a drought belongs to the state government.
The 2026 monsoon, weakened by El Niño, ended about 12.6% below the long-period average, with much bigger deficits in eastern and southern India. States use this manual to decide which districts get drought relief. The same rain shortage that triggers drought declarations has also shrunk the kharif harvest, which is why market prices have risen above MSP.
- 2026 southwest monsoon: about 87% of the long-period average (deficit of about 12.6%); rainfall about 759.4 mm against an LPA of about 868.6 mm
- Regional deficits: east and northeast India about 25.6%; southern peninsula about 24.3%
- El Niño declared by NOAA on 11 June 2026; confirmed by IMD on 12 June 2026
- 2026-27 kharif MSP (per quintal): paddy (common) ₹2,441; maize ₹2,410; tur ₹8,450; moong ₹8,780; urad ₹8,200; yellow soybean ₹5,708; cotton (medium staple) ₹8,267
- MSP announced for 22 mandated crops (14 kharif); recommended by CACP, approved by CCEA; at least 1.5 times A2+FL cost since 2018-19
- Drought is declared by state governments under the Manual for Drought Management (2016, updated 2020)