Date: 22 Jan 2025 The Cabinet Committee on Economic Affairs, chaired by PM Narendra Modi, has approved the Minimum Support Price (MSP) for raw jute (TD-3 grade) at ₹5,650 per quintal for the 2025-26 marketing season, offering a 66.8% return over the production cost.
This marks a ₹315 increase from ₹5,335 in 2024-25 and a 2.35x rise from ₹2,400 in 2014-15. From 2014-15 to 2024-25, ₹1,300 crore was paid to jute farmers, compared to ₹441 crore during 2004-13.
The jute sector supports 40 lakh farming families and employs 4 lakh workers, with West Bengal producing 82% of India’s jute. The Jute Corporation of India will continue as the nodal agency for price support, with full reimbursement for any losses.
Date: The Cabinet Committee on Economic Affairs has approved the revised Minimum Support Price (MSP) for Copra for the 2025 season. This decision aligns with the government’s commitment to ensuring fair returns for farmers as announced in the Union Budget 2018-19. The MSP for mandated crops, including copra, is fixed at levels at least 1.5 times the all-India weighted average cost of production.
MSP Details for 2025 Season
- Milling Copra (Fair Average Quality): ₹11,582 per quintal
- Ball Copra: ₹12,100 per quintal
This represents a 121% growth for milling copra and a 120% growth for ball copra compared to their MSPs of ₹5,250 and ₹5,500 per quintal, respectively, in the 2014 marketing season.
Key Highlights:
- Better Returns for Farmers:
The increased MSP guarantees remunerative prices for coconut growers, promoting agricultural stability and growth. - Encouraging Production Expansion:
The higher MSP incentivizes farmers to boost copra production, addressing the growing domestic and international demand for coconut-based products. - Long-Term Price Support:
National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) and National Cooperative Consumers’ Federation (NCCF) will continue as Central Nodal Agencies (CNAs) to procure copra and de-husked coconut under the Price Support Scheme (PSS).
Government’s Supportive Framework
Since the MSP mechanism began, the government has significantly increased support prices to enhance farmer welfare. The MSP hike for the 2025 season reflects a proactive approach toward empowering coconut farmers, especially in key producing states such as Kerala, Tamil Nadu, and Karnataka.
By fixing the MSP at 1.5 times the production cost, the government ensures financial security for farmers while encouraging sustainable agricultural practices. The decision will positively impact over 90,000 farmers, as seen in the 2023 procurement data, which marked a significant increase in government-backed purchases.
The Indian government has announced the Minimum Support Prices (MSP) for various crops for the 2025-26 marketing season, aiming to ensure remunerative returns to farmers and encourage crop diversification. Below is a summary of the MSPs for both Rabi and Kharif crops:
Rabi Crops (Marketing Season 2025-26): – Sourced from PIB (PRESS INFORMATION BUREAU)
| Crop | MSP (₹ per quintal) | Cost of Production (₹ per quintal) | Margin over Cost (%) | Increase from Previous Year (₹) |
|---|---|---|---|---|
| Wheat | 2,425 | 1,182 | 105 | 150 |
| Barley | 1,980 | 1,239 | 60 | 130 |
| Gram | 5,650 | 3,527 | 60 | 210 |
| Lentil (Masur) | 6,700 | 3,537 | 89 | 275 |
| Rapeseed & Mustard | 5,950 | 3,011 | 98 | 300 |
| Safflower | 5,940 | 3,960 | 50 | 140 |
Kharif Crops (Marketing Season 2024-25):
| Crop | MSP (₹ per quintal) | Cost of Production (₹ per quintal) | Margin over Cost (%) | Increase from Previous Year (₹) |
|---|---|---|---|---|
| Paddy (Common) | 2,300 | 1,533 | 50 | – |
| Paddy (Grade A) | 2,320 | – | – | – |
| Jowar (Hybrid) | 3,371 | 2,247 | 50 | – |
| Jowar (Maldandi) | 3,421 | – | – | – |
| Bajra | 2,625 | 1,485 | 77 | – |
| Ragi | 4,290 | 2,860 | 50 | – |
| Maize | 2,225 | 1,447 | 54 | – |
| Tur (Arhar) | 7,550 | 4,761 | 59 | 550 |
| Moong | 8,682 | 5,788 | 50 | – |
| Urad | 7,400 | 4,883 | 52 | – |
| Groundnut | 6,783 | 4,522 | 50 | – |
| Sunflower Seed | 7,280 | 4,853 | 50 | – |
| Soyabean (Yellow) | 4,892 | 3,261 | 50 | – |
| Sesamum | 9,267 | 6,178 | 50 | 632 |
| Nigerseed | 8,717 | 5,811 | 50 | 983 |
| Cotton (Medium) | 7,121 | 4,747 | 50 | – |
| Cotton (Long) | 7,521 | – | – | – |
These MSPs are part of the government’s strategy to provide farmers with assured prices that cover their production costs and offer a reasonable profit margin. The increases in MSPs are also intended to encourage the cultivation of diverse crops, thereby promoting agricultural sustainability and food security.
How MSP is Decided
The increase in MSP for the 2025 season is a testament to the government’s ongoing efforts to uplift India’s agricultural community. With enhanced pricing, robust procurement strategies, and expanding market opportunities, the revised MSP is set to drive the growth of the coconut farming sector.
The Minimum Support Price (MSP) is a government-fixed price aimed at protecting farmers from falling prices of agricultural products. Here’s a breakdown of how MSP is decided:
1. Recommendation by CACP
- The Commission for Agricultural Costs and Prices (CACP) plays a crucial role. It evaluates various factors and submits recommendations to the government.
- The CACP considers:
- Cost of Production (CoP): Includes input costs like seeds, fertilizers, labor, fuel, etc.
- Demand and Supply: Ensures MSP aligns with market dynamics.
- Market Price Trends: Includes past and current market prices for crops.
- Inter-Crop Price Parity: Ensures price fairness among crops to avoid distortion in production patterns.
- International Prices: To make Indian crops competitive globally.
- Input-Output Parity: Checks the relation between farmers’ costs and their potential earnings.
2. Types of Cost Considered
CACP calculates costs at three levels:
- A2: Covers direct costs like seeds, fertilizers, labor, etc.
- A2+FL: Includes A2 costs plus the value of unpaid family labor.
- C2: A more comprehensive metric, which includes A2+FL and additional costs like rental value of land and interest on owned capital.
C2 is often suggested by farmers’ groups as a fair standard for MSP calculation, but the government usually uses A2+FL as the benchmark.
3. Government Decision
- The CACP submits its report to the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister.
- The CCEA reviews the recommendations and announces MSP for specific crops.
4. Number of Crops Covered
Currently, MSP is declared for 23 crops, including cereals, pulses, oilseeds, and commercial crops like cotton and sugarcane.
5. Key Objectives of MSP
- Farmer Welfare: Ensures farmers get a fair price, safeguarding them from market volatility.
- Food Security: Encourages production of essential crops to ensure food availability.
- Income Parity: Helps in reducing income disparities between rural and urban populations.
Example for Finding MSP:
MSP for Wheat in 2023-24
The MSP for wheat was set at ₹2,275 per quintal for the 2023-24 Rabi season. Let’s break down how this decision was made:
1. Cost Analysis
- Cost of Production (A2+FL): The CACP considered the average cost of wheat production, including paid inputs like seeds, fertilizers, and unpaid family labor, which was estimated at ₹1,350 per quintal.
- The government ensures at least a 50% margin over the cost of production for farmers. For wheat, the MSP was set much higher than the production cost to ensure a fair profit.
2. Price Trends
- In the previous market season, the average wholesale price of wheat hovered around ₹2,200 per quintal in major markets.
- To incentivize farmers and provide price stability, the MSP was slightly increased.
3. Demand and Supply
- Wheat is a staple crop in India, and maintaining sufficient production is critical for food security.
- To encourage higher wheat production in the upcoming season, the government increased the MSP by ₹150 per quintal from the previous year.
4. Farmer Welfare
- The hike in MSP aimed to protect farmers against international price volatility and fluctuating domestic demand.
- Additionally, the government procures wheat at MSP through agencies like the Food Corporation of India (FCI) to stock for the Public Distribution System (PDS).
Impact
- Farmers were assured of a guaranteed price for their produce, encouraging them to cultivate wheat without the fear of losses.
- The government’s wheat procurement increased, stabilizing food grain stocks and ensuring affordability for consumers.
“FAQs”
A: MSP is the minimum price set by the Government of India to ensure farmers receive fair compensation for their crops, even if market prices fall below the specified level. It aims to protect farmers from price fluctuations and provide a safety net.
A: The MSP system covers 22 crops, including cereals (paddy, wheat, barley, jowar, bajra, maize, and ragi), pulses (gram, tur, moong, urad, and masur), oilseeds (groundnut, mustard, soybean, sunflower, safflower, sesamum, and nigerseed), and commercial crops like cotton, jute, and sugarcane.
A: MSP is determined based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). Factors considered include the cost of production, demand-supply conditions, market trends, and a 50% profit margin over the all-India weighted average cost of production.
A: MSP ensures that farmers receive a guaranteed price for their produce, reducing the risk of losses due to market volatility. It encourages crop diversification, ensures financial stability for farmers, and boosts agricultural productivity.
A: For the 2025 season, the MSP for milling copra is ₹11,582 per quintal and ball copra is ₹12,100 per quintal. The MSP for wheat is ₹2,425 per quintal, marking a ₹150 increase from the previous year.
