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News: The Cabinet Committee on Economic Affairs has increased the Minimum Support Price (MSP) for rabi crops for the next marketing season of 2025-26.
1. Minimum Support Price (MSP) is the government established minimum price at which farmers sell their crops to the government.
2. MSP aims to protect farmers from market volatility, ensure income stability, procure food grains for public distribution.
3. It is announced for 22 major agricultural commodities: 14 Kharif crops, 6 Rabi crops and 2 Commercial crops. While Fair and Remunerative Price (FRP) is announced for sugarcane.
4. It is fixed by the Cabinet Committee on Economic Affairs on the recommendations of Commission for Agricultural Costs and Prices (CACP).
5. While determining MSP, CACP considers 3 types of production costs: A) A2, which covers costs incurred by the farmer in producing a particular crop B) A2+FL, which includes A2 cost plus an imputed value of unpaid family labour C) C2, which is a comprehensive cost and includes rentals and interest forgone on owned land and capital assets, on top of A2+FL.
