Why in news
- Union Cabinet approved a 1% to 10% hike in Minimum Support Price (MSP) for Rabi crops for the upcoming marketing season.
- Wheat MSP was increased to ₹2,610 per quintal from ₹2,585 per quintal.
Key terms
Commission for Agricultural Costs and Prices
An attached office of the Agriculture Ministry that submits MSP recommendations for mandated crops.
A2+FL Cost Formula
Cost metric including paid-out expenses on seeds, fertilizer, labor plus imputed value of unpaid family labor.
Rabi Season
Agricultural cropping season sown in winter (October-December) and harvested in spring (March-April).
Cabinet Committee on Economic Affairs
Cabinet panel chaired by the Prime Minister that gives final executive approval for MSP revisions.
What is Minimum Support Price?
- Fixed procurement price set by the government to ensure remunerative prices to farmers and protect against distress sales.
- Recommended by the Commission for Agricultural Costs and Prices (CACP) and approved by the Cabinet Committee on Economic Affairs (CCEA).
Key decisions taken
- Revised MSP covers key Rabi crops including wheat, mustard, gram, lentil, and barley.
- Wheat procurement price raised by ₹25 to ₹2,610 per quintal.
- Increases align with the statutory mandate to set MSPs at a minimum of 50% profit margin over A2+FL cost of production.
Why it matters
- Directly impacts farm income security ahead of the Rabi sowing season.
- Influences food procurement costs and central agricultural subsidy bill allocations.
Prelims facts
- MSP recommendations are formulated by CACP and approved by CCEA.
- MSP principle targets a minimum return of 50% over A2+FL production cost.
Mains discussion
- Impact of MSP revisions on crop diversification and public procurement fiscal burdens.
Source: The Hindu Business Line
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