Cabinet hikes paddy MSP by 3%, pulses and oilseeds see bigger increase

With record rice stockpiles, the Cabinet has limited the paddy MSP hike to 3 per cent, while offering higher increases for tur, ragi, oilseeds, and cotton

With the Food Corporation of India (FCI) sitting on huge stockpiles of rice, the Union Cabinet on Wednesday hiked the minimum support price (MSP) of paddy for the 2025-26 marketing season by a modest 3 per cent, the lowest in the last five years.

 

At the same time, the Centre raised the support prices of pulses and oilseeds by a higher percentage compared to the 2024-25 season. The 2025-26 marketing season starts from July 2025.

 

During the 2024-25 season, the MSP of paddy was raised by 5.3 per cent compared to the year-ago period.

 

Since the last many years, the MSPs of oilseeds and pulses have been increased more in proportion to cereals to encourage farmers to switch towards them.

   

For 2025-26, the MSP of groundnut was raised by 7.1 per cent to ₹7,263 per quintal, while that of soybean yellow was raised by 8.9 per cent to ₹5,328. 

 

The MSP of tur was raised by 6 per cent to ₹8,000 for 2025-26 while urad has been hiked by 5.4 per cent to ₹7,800.

 

The FCI has been sitting on a huge stockpile of rice, estimated at around 60 million tonnes as on April 30, 2025 (includes unmilled paddy lying with millers) against the April 1 buffer requirement of 13.58 million tonnes.

 

Wheat stocks during the same period were pegged at 35.67 million tonnes against an April 1 buffer requirement of 7.46 million tonnes.

 

Among the crops whose MSP was raised the most in percentage terms during kharif 2025-26 compared to the same period this year was ragi. Its MSP was hiked by almost 14 per cent to ₹4,886 per quintal.

 

Last year, too, in kharif 2024-25, MSP of ragi was raised by a steep 11.5 per cent. Ragi is a major crop in the whole ‘Sri Anna’ complex.

 

“The hike in MSP of most-cultivated paddy crop is only 3 per cent which is lower than inflation and hike in input cost. The MSP increase of other crops is only for symbolic value without purchase arrangement,” said professor Sudhir Panwar, a former member of the Uttar Pradesh Planning Commission.

 

Meanwhile, the Cabinet’s announcement comes amid the southwest monsoon reaching its destination earlier than usual. This is giving a boost to the sowing of kharif crops, which contribute over 50 per cent of India's total annual foodgrain production.

 

“In the last 10-11 years, there has been a ‘massive’ increase in the support price of 14 kharif crops in line with the recommendations of the Commission for Agricultural Costs and Prices,” Union Information and Broadcasting Minister Ashwini Vaishnaw said while announcing the decisions of the Cabinet.

 

Among other crops, the MSP of sunflower seeds has been raised by 6.1 per cent in the 2025-26 kharif marketing season to ₹7,721 per quintal while for sesame seeds, it has been hiked by 6.2 per cent to ₹9,846. For nigerseed, the hike was by 9.4 per cent to ₹9,537 for 2025-26.

 

Among cash crops, cotton MSP has been increased by 8.3 per cent to ₹7,710 (medium staple) and by 7.8 per cent to ₹8,110 (long staple), respectively, for 2025-26.

 

The increase in 2025-26 kharif crop MSP is in line with the Union Budget 2018-19 announcement of fixing the MSP at a level of at least 1.5 times the all-India weighted average cost of production.

 

The expected margin to farmers over their cost of production is estimated to be highest in the case of bajra (63 per cent), followed by maize (59 per cent), tur (59 per cent) and urad (53 per cent).

 

For the remaining crops, the margin to farmers is estimated to be at 50 per cent, the minister added.

 

The highest absolute increase in MSP over the previous year has been recommended for nigerseed, followed by ragi, cotton, and sesamum.

 

Crop loans: The Cabinet also approved continuation of the Modified Interest Subvention Scheme (MISS) for 2025-26 under which farmers get short-term credit at affordable rates through their Kisan Credit Cards (KCC).

 

Continuation of the scheme will cost the exchequer ₹15,640 crore.

 

Under the MISS, farmers get short-term loans of up to ₹3 lakh through KCC at a subsidised interest rate of 7 per cent, with 1.5 per cent interest subvention provided to eligible lending institutions. 

 

Foodgrain production  hits record 353.95 mt  

  India’s foodgrain production touched an all-time high of 353.95 million tonnes (mt) in 2024-25 crop season that will end in June, largely aided by record harvest of rice, wheat and maize, according to the third advance estimates. 

In absolute terms, foodgrain production rose by nearly 22 mt in 2024-25 Y-o-Y. Rice production in  touched a record 149.07 million tonnes, up 8.2 per cent Y-o-Y, and wheat production was estimated at an all-time high of 117.50 million tonnes. The Centre in its earlier estimates had estimated wheat output at 115 mt. 

With 149 million tonnes, India has now surpassed China as the world’s largest rice producer. Maize production in 2024-25, has jumped by a staggering 12.3 per cent as per the third advance estimate to over 42 million tonnes, while oilseeds production has risen by 7.4 per cent to 42.60 million tonnes in 2024-25. Sugarcane production was lower at 0.7 per cent in 2024-25 while cotton production dropped by almost 5.6 per cent, as per the third estimates.