The government on Wednesday announced annual hikes ranging from 1–10% in the minimum support prices (MSP) for winter-sown crops for the 2027-28 marketing season (April-June).
The MSP for wheat, the key rabi cereal, has been raised by barely 1% while the remunerative price for safflower has been hiked the most by 10.3%.
The government is using the support price mechanism to encourage crop diversification. Oil seeds MSPs have been raised in a significantly higher range, at a time rising edible oil imports bill tend to jack up the trade and current account deficits.
India imported edible oils worth $18.3 billion in 2024-25 oil year through October. This year, the impor bill is expected to significantly higher as Indonessia has diverted palm oil for ethanol blending, constricting supplies and inflating the global prices.
The MSP of wheat has been raised to Rs 2,610/quintal for 2026-27 season from Rs 2585/quintal in the previous season. The increase in the remunerative price for the cereal in the previous year (2025-26) was 6.6% on year.
“The production cost of wheat is Rs 1,264/quintal, but MSP has been kept more than double at Rs 2,610/quintal for 2027-28,” Ashwini Vaishnaw, Information and Broadcasting Minister, said in a briefing.
At present, the Food Corporation of India (FCI) holds 46.76 million tonne (MT) wheat against the buffer of 20.52 MT for October 1, mainly because of over 35 MT of grain purchased from the farmers under MSP. Modest MSP hike for wheat sources said is because of surplus grain stock and need to boost oilseeds and pulses production.
The highest increase of over 10% in the MSP has been approved for safflower seed to Rs 7215/quintal aimed at boosting production of sunflower oils so that import dependence on edible oil could be reduced.
The MSP of mustard seeds, which has a share of more than 40% in the country’s edible oil production, has been hiked by Rs 413/quintal or an increase of 6.6% to Rs 6613/quintal for the next marketing season compared to the current season.
The MSP for gram has been increased by 1.4% to Rs 5,958/quintal in 2027-28 marketing year, from the current MSP of Rs 5,875/quintal. Gram has around 50% share in the country’s pulses output and biggest pulse crop in terms of area.
“The higher mustard MSP could also influence crop rotation and acreage decisions in some rabi-growing regions. In china, however, the 1.4% MSP increase is modest, so market direction will depend more on crop size, procurement intensity and overall supply-demand balance,” Harsha Rai, Head, Mayur Global Corporation, leading pulses trading firm, told FE.
“The expected margin over All-India weighted average cost of production is 106% for wheat , mustard (96%), lentil ( 92%), gram (59%), barley (58%) and safflower (50%) ,” according to an official statement. The increase in MSP for mandated rabi crops for marketing season 2027-28 is in line with the union budget 2018-19 announcement of fixing the MSP at a level of at least 1.5 times of the All-India weighted average cost of production,” according to the official statement.
Vaishnaw said the government is aiming to procure 32.4 MT of rabi crops including wheat, mustard, gram and lentils under which Rs 90,962 crore will be paid to farmers against the MSP purchase.
However, the volume of procurement in the next marketing season by Food Corporation of India (FCI), NCCF and NAFED is likely to increase as agencies purchased over 35 MT of wheat in the 2026-27 marketing season.
The government fixes MSP following the reports of the Commission for Agricultural Costs and Prices (CACP), which recommends the MSPs for around 23 crops to the government.
Rabi crops are sown during October and November and the produce is harvested from February depending on the maturity period of the crop.
From 2018-19, a new policy of 50% profits over computed cost of production was adopted, which resulted in MSP hikes for rabi crops in the range of 5-7.6%.