With reference to the Minimum Support Price (MSP) for the 2027-28 marketing year, consider the following statements: 1. The Commission for Agricultural Costs & Prices (CACP) provides recommendations for MSP. 2. The Union Cabinet approved MSP hikes for six rabi crops including wheat, barley, and masur. 3. The wheat MSP was set at ₹2,610 per quintal, which is less than its production cost of ₹1,264 per quintal. Which of the statements given above is/are correct?

Modi cabinet approves rabi crop MSP hikes with ₹90,962 crore farmer payout

GS3Economy · S&T · Environment · Security· MSP, procurement, PDS & food security· Prelims· 30 September 2026

MSP and agricultural economics: a key GS3 topic regarding farmer income security and fiscal health.

Why in news

The Union Cabinet approved increased Minimum Support Prices (MSP) for six rabi crops for the 2027-28 marketing year, with a total estimated farmer payout of ₹90,962 crore.

Background

The Cabinet approved MSP hikes for wheat, barley, gram, masur, rapeseed/mustard seed, and safflower. The wheat MSP was set at ₹2,610 per quintal for 2027-28, which is more than double its production cost of ₹1,264 per quintal.

Facts for Prelims

FactWheat MSP for 2027-28 rabi marketing year: ₹2,610 per quintal
FactBarley MSP for 2027-28: ₹2,286 per quintal
FactMasur MSP for 2027-28: ₹7,390 per quintal
FactSafflower MSP for 2027-28: ₹7,215 per quintal
BodyCACP (Commission for Agricultural Costs & Prices) provides recommendations for MSP

Prelims practice question

With reference to the Minimum Support Price (MSP) for the 2027-28 marketing year, consider the following statements:

The Commission for Agricultural Costs & Prices (CACP) provides recommendations for MSP.
The Union Cabinet approved MSP hikes for six rabi crops including wheat, barley, and masur.
The wheat MSP was set at ₹2,610 per quintal, which is less than its production cost of ₹1,264 per quintal.

Which of the statements given above is/are correct?

(a)2 only
(b)3 only
(c)1 and 2 only
(d)1 and 3 only

Show answer

Answer: (c) 1 and 2 only — Statements 1 and 2 are correct. Statement 3 is incorrect: The wheat MSP is more than double its production cost.

For Mains

Q. Discuss the role of Minimum Support Price (MSP) in ensuring farmer income security and its impact on the fiscal health of the public distribution system.

Dimensions to cover in your answer

Fiscal burden: High MSP-to-production cost ratios impacting government expenditure on procurement
Market distortion: Potential for over-production of specific crops leading to supply-side imbalances
Price stability: Balancing domestic food security with global price trends and El Nino impacts

Keywords: Minimum Support Price · Rabi crops · CACP · Food Security · Agricultural Economics

Read the full news →Report a mistake in this note Source: The Hindu ↗Also: GS3 · Fiscal policy, budget & taxation (GST)

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