In an apparent move to correct price distortions in certain crops as flagged by the Economic Survey, the Indian government announced a Rs 10/quintal hike in minimum support price (MSP) of maize and a modest 3 per cent rise in paddy MSP for kharif 2026. The MSP for pulses (except moong), oilseeds and nutri-cereal crops has been increased by 4-9 per cent compared with a year ago.
Announcing the new MSPs for the ensuing kharif season after the Cabinet Committee on Economic Affairs (CCEA) approved the price recommendations of the Commission for Agricultural Costs and Prices (CACP), Information and Broadcasting Minister Ashwini Vaishnaw said the MSPs have been fixed to ensure remunerative prices for farmers and are at least 50 per cent above the cost of production (A2+FL formula) across all the 14 crops.
The government estimates the total payout to farmers at Rs 2.60 lakh crore after the revision in MSPs he said, adding that the annual procurement is estimated to be 824 lakh tonnes. The margin over costs is estimated to be highest for moong (61 per cent), followed by bajra and maize (56 per cent each) and tur/arhar (54 per cent), he noted.
Ethanol programme blamed
The Minimum Support Price (MSP) for paddy has been increased by Rs 72/quintal to Rs 2,461/per quintal, that of maize by 0.4 per cent to Rs 2,410/quintal and moong 0.1 per cent to Rs 8,780/quintal. The common grade paddy MSP has also been raised by Rs 72 to Rs 2,441/quintal from Rs 2,369/quintal. In the government procurement for the Central Pool, over 85 per cent of paddy are of Grade A varieties.
On the other hand, tur (arhar) MSP has been hiked by Rs 450 to Rs 8,450/quintal, urad by Rs 400 to Rs 8,200 per quintal. Similarly, soyabean has been given a rise of Rs 380 by fixing its MSP at Rs 5,708/quintal and groundnut raised by Rs 254 to Rs 7,517 per quintal. Even, sunflower seed MSP is up by Rs 622 to Rs 8,343/quintal, that of niger by Rs 515 to Rs 10,052/quintal and sesamum by Rs 500 to Rs 10,346/quintal.
The Economic Survey, presented by the government in January 2026, had blamed rise in maize crop due to ethanol programme at the cost of oilseeds and pulses while paddy area also grew. Pointing out that prices of ethanol produced from maize were raised at 11.7 per cent CAGR during three years to FY25, it failed to reduce paddy acreage as intended, whereas production of millets, pulses and oilseeds either stagnated or declined.
In 2025-26, the MSP of maize was raised 8 per cent as a result the acreage rose to 120.91 lakh hectare (lh) from 112.41 lh and its production too surged to 434 lakh tonnes (lt) from 377 lt. Farmers further expanded the area to 138 lh in 2025-26 despite maize prices ruled 27 per cent below MSP at average Rs 1,739/quintal between October 2025 and April 2026.
Plea to reconsider
The MSP for cotton (long staple), as preferred by most farmers, is up by Rs 557 to Rs 8,667/quintal. The medium staple cotton MSP, too has been increased by same Rs 557 to Rs 8,267/quintal.
The MSP of jowar (sorghum) has been given maximum hike of 8.8 per cent among all the 14 crops and will now command Rs 4,023/quintal from Rs 3,699/quintal. Bajra (millet) MSP will be now Rs 2,900/quintal, up from Rs 2,775/quintal in 2025-26. Ragi MSP has also been decently hiked by Rs 319 (or 6.5 per cent) to Rs 5,205 per quintal.
Reacting to the announcement of new MSPs, Dharmendra Malik, spokesperson of Bharatiya Kisan Union (apolitical), said that the production costs of crops have surged by over 30 per cent after geopolitical tensions in the Gulf region and the 3 per cent hike in paddy MSP is highly inadequate. Requesting the government to reconsider the decision as it will increase the debt burden of rice-producing farmers, Malik said the government should have considered the apprehension of lower production amid forecast of below normal monsoon once El Nino sets in.