Government says procurement of 22 MSP crops reached 12,819 lakh metric tonnes between 2014 and June 2026, while new measures target pulses and perishable produce

Key Highlights

• MSPs are fixed annually for 22 mandated agricultural crops based on CACP recommendations.
• Government has followed the principle of setting MSP at least 1.5 times the all-India weighted average cost of production since 2018–19.
• Procurement of MSP crops rose to 12,819 lakh metric tonnes during 2014–26, compared with 6,987 LMT during 2004–14.
• MSP payments to farmers increased to ₹27.80 lakh crore during 2014–26, compared with ₹7.41 lakh crore during 2004–14.
• From 2021–22 to 2025–26, procurement stood at 5,781 LMT, with MSP value of ₹14.58 lakh crore.
• New measures include price-differential payments and transportation and storage support for TOP crops—tomato, onion and potato.

India’s government has highlighted the expansion of Minimum Support Price (MSP) procurement and new market-intervention measures aimed at protecting farmers from price crashes, while strengthening the broader agricultural supply chain.

The government fixes MSPs every year for 22 mandated crops, based on recommendations from the Commission for Agricultural Costs & Prices (CACP) and after considering inputs from State Governments and concerned Central Ministries and Departments.

Since 2018–19, MSPs have been set at a minimum of 1.5 times the all-India weighted average cost of production, following the principle announced in the Union Budget 2018–19.

The information was provided by Minister of State for Agriculture and Farmers Welfare Ramnath Thakur in a written reply in the Lok Sabha.

MSP procurement and payments rise sharply

Government data shows that procurement of all 22 MSP crops increased substantially over the past decade.

Between 2014 and June 2026, total procurement reached 12,819 lakh metric tonnes (LMT), compared with 6,987 LMT during 2004–14.

The MSP value paid to farmers increased from ₹7.41 lakh crore during 2004–14 to ₹27.80 lakh crore during 2014–26, up to June 2026.

During the five-year period from 2021–22 to 2025–26, procurement of MSP crops stood at 5,781 LMT, with a total MSP value of ₹14.58 lakh crore paid to farmers.

How government procurement works

MSP procurement is triggered when market prices fall below the applicable MSP, with procurement mechanisms varying by crop.

Cereals and coarse cereals are procured through the Food Corporation of India (FCI) and designated State agencies.

Pulses, oilseeds and copra are procured under the Price Support Scheme (PSS) of the broader Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA).

The principal Central Nodal Agencies involved in this procurement are NAFED and the National Cooperative Consumers’ Federation of India (NCCF).

Cotton and jute are procured through the Cotton Corporation of India (CCI) and Jute Corporation of India (JCI) respectively.

Procurement network expands closer to farmers

The government says procurement centres are established based on production levels, marketable surplus, farmer convenience and the availability of storage, transport and other infrastructure.

Temporary procurement centres may also be opened alongside existing mandis, depots and godowns.

The procurement system has increasingly incorporated digital mechanisms, including direct payment of MSP proceeds into farmers’ bank accounts and linking Aadhaar and land records with State procurement portals.

These measures are intended to ensure that farmers directly receive the benefits of government procurement.

Push for greater pulse self-reliance

The government is also using procurement as part of its Mission for Aatmanirbharta in Pulses, which runs through 2030–31 and aims to reduce India’s dependence on imported pulses.

Under PM-AASHA, the government is undertaking procurement of tur, urad and masur from pre-registered farmers, on the request of State Governments.

NAFED and NCCF undertake the procurement through the designated Central Nodal Agency framework.

For India’s food sector, the pulse initiative has wider significance as domestic availability of pulses is closely linked to food inflation, protein security and the cost structure of restaurants, hotels and institutional kitchens.

New support for perishable agricultural produce

MSP is not the only mechanism being used to protect agricultural producers.

The government also operates the Market Intervention Scheme (MIS) under PM-AASHA for perishable agricultural and horticultural commodities that are not covered by the Price Support Scheme.

The objective is to protect farmers from distress sales during periods of bumper production, when market prices can fall below economically viable levels.

The scheme can be activated at the request of State or Union Territory governments when ruling market prices decline by at least 10% compared with the previous normal year.

From the 2024–25 season, the government introduced a Price Differential Payment (PDP) component under MIS.

States and UTs can choose between physical procurement or making direct payments to farmers to cover the difference between the Market Intervention Price (MIP) and the selling price.

Government adds support for tomato, onion and potato

Another change introduced from 2024–25 focuses specifically on TOP crops—tomato, onion and potato.

The government now provides for reimbursement of storage and transportation costs to Central Nodal Agencies and State-designated agencies for moving these crops from producing States to consuming States.

The objective is to help address supply imbalances while protecting farmers during periods when excess production puts downward pressure on prices.

For the food industry, the TOP supply chain is particularly significant because tomatoes, onions and potatoes are among the most widely used ingredients in Indian commercial kitchens.

What MSP policy means for food and hospitality

For the hospitality and foodservice industry, MSP policy has an indirect but important impact.

A more structured procurement system can provide greater stability to the agricultural base supplying hotels, restaurants, caterers and food processors. This is particularly relevant for commodities that form the foundation of Indian cuisine.

The impact is strongest across:

• Pulses: important sources of protein and core ingredients in Indian menus.
• Oilseeds: critical for edible-oil supply and food preparation.
• Cereals: foundational ingredients for breads, rice-based dishes and processed foods.
• Tomatoes, onions and potatoes: high-volume ingredients used extensively across commercial kitchens.
• Horticultural produce: important for fresh food, hotel kitchens and regional cuisine.

However, MSP does not automatically determine retail or wholesale prices for hotels and restaurants. Market conditions, production, logistics, storage, weather and demand continue to influence the final price paid by food businesses.

Tourism and regional food supply

The policy also has relevance for culinary and rural tourism.

A more resilient agricultural supply chain can help sustain regional food traditions that depend on locally grown grains, pulses, oilseeds and horticultural produce.

For tourism destinations, stronger farm-to-market infrastructure can support local sourcing, regional cuisine and farm-linked tourism experiences, while improved movement and storage of perishable produce can reduce supply disruptions.

Building a more resilient farm-to-food ecosystem

The government’s expanding MSP procurement, alongside crop diversification, irrigation, infrastructure, farmer collectives, digital agriculture and market-intervention measures, reflects a broader effort to strengthen the agricultural value chain.

For the food and hospitality industry, the significance lies not only in the price farmers receive, but in whether these policies ultimately create more predictable, resilient and efficient supply chains for the ingredients that underpin India’s food economy.