Cabinet approves hike in MSP of 14 crops for 2024-25 kharif season

The Cabinet has approved a hike in the minimum support prices (MSP) for 14 crops for the 2024-25 kharif season (July-June), with increases ranging from 1.4% to 12.7%. Notably, the MSP for paddy, the main summer crop, has been raised by a modest 5.35%, setting it at Rs 2,300 per quintal.

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The Cabinet approved increases ranging from 1.4% to 12.7% in the MSP of 14 crops for the 2024-25 kharif season (July-June). Notably, the MSP for paddy, the principal summer crop, has been increased by a modest 5.35% to Rs 2,300 per quintal. This is a slight increment from the previous year’s MSP of Rs 2,183 per quintal, which had already seen a 7% rise from the prior year.

With substantial rice stocks amounting to 31.98 million tonnes (MT) as of June 1, the government aims to encourage farmers, particularly in Punjab and Haryana, to diversify their crops towards more lucrative pulses and oilseeds. Currently, the Food Corporation of India (FCI) holds 50.08 MT of rice, which includes 18.12 MT receivable from millers, far exceeding the buffer requirement of 13.54 MT for July 1.

In the 2024-25 season, the MSP for moong will be Rs 8,682 per quintal, marking a 1.4% increase, while the MSP for Tur/Arhar will rise by 7.9% to Rs 7,550 per quintal. Groundnut and soybean, crucial oilseeds of the kharif season, will see MSP hikes of 6.4% and 6.3% respectively, with new prices set at Rs 6,783 per quintal for groundnut and Rs 4,892 per quintal for soybean.

Since 2018-19, the government has pursued an MSP policy to ensure at least a 50% profit over the computed cost of production for crops. That year, MSP hikes for kharif crops were significantly higher, ranging from 4.1% to 28.1%. The higher MSPs for pulses and oilseeds this season are expected to enhance the gross value added (GVA) in agriculture and allied services, particularly in the second half of the year when procurement begins in October.

The agriculture GVA grew by only 1.4% in FY24, the slowest since FY19, due to below-normal monsoon rainfall affecting crop output in 2023. Elevated MSPs, supported by effective procurement, could potentially uplift rural incomes and purchasing power. “Due to today’s decision, farmers will receive Rs 2 trillion through MSP, which is Rs 35,000 crore more than the previous season,” said Information and Broadcasting Minister Ashwini Vaishnaw.