The reality behind the MSP hike on Rabi crops


Days after facing intense farmers’ protests over multiple issues at Delhi-UP border the Union Cabinet on October 03, announced the increase in MSP of all six Rabi crops. The procurement for these crops will begin around Loksabha polls next year. The government notification claims that this will give “… a boost to farmers’ income”. And, this farmer friendly initiative will give an additional return to the farmers of Rs 62,635 crore. The notification also claims that the increase in MSP of notified crops is at least 50 per cent over the cost of production and it will aid in doubling farmers’ income by 2022.

The MSP of 14 Kharif crop was increased in July for the marketing season which begins this month. The MSP of Wheat has been increased by Rs. 105 per quintal, Rs. 845 per quintal for safflower, Rs. 30 per quintal for barley, Rs. 225 per quintal for lentil, Rs. 220 per quintal for gram and Rs. 200 per quintal forrapeseed and mustard, as against the existing MSP notified in 2017-18 for the marketing season in 2018-19.

The government’s claim of 50% hike over the cost of production on Rabi crops is not actually C2+50%, as prescribed by the Swaminathan Committee and asked by the farmers. CACP calculation of the projected cost of production of Mandated Rabi Crops for the marketing year 2019-20 suggests that the cost of production (C2) for the wheat is Rs. 1339 per quintal. And, for the sake of MSP and doubling farmers’ income, if we add fifty per cent to C2 cost, the output should be around Rs. 2008 per quintal. But, the government is offering Rs. 1840 per quintal i.e. Rs. 168 per quintal less than what the farmers should get for the sale of wheat in 2019-20 marketing season. The MSP is only 27.22 % above C2, which is the highest among all the Rabi crops and a real deal breaker for the farmers and the ambition of the year 2022.

MSP on Rabi crops and comparison with C2+50%

S. No. Crops C2 (Rs./Q.) Declared MSP (Rs./Q.) Percentage over C2 (%) MSP =

C2 + 50%

Difference between declared MSP and C2+50%
1.        Wheat 1339 1840 27.22 2008.5 168.5
2.        Barley 1247 1440 13.40 1870.5 430.5
3.        Gram 3838 4620 16.92 5757.0 1137.5
4.        Lentil 4215 4475 5.81 6322.5 1847.5
5.        Rapeseed & Mustard 3277 4200 21.97 4915.5 715.5
6.        Safflower 4072 4945 17.65 6108.0 1163.5

Source: Price Policy for Rabi Crops, 2019-20, CACP and Government notification dated October 3, 2018.


The MSP for barley is only 13.40 % above C2, its 16.92 % for gram, just 5.81 % for lentil, 21.97 % for rapeseed & mustard and 17.65 % for safflower. The price difference in terms of the rupees is Rs. 1847 per quintal, the highest among Rabi crops, Rs. 1137 per quintal &Rs. 1163 per quintal for the gram and Safflower respectively. It’s Rs. 715 per quintal for rapeseed & mustard and Rs. 430 per quintal for barley. The price difference is what the farmers are not getting for their Rabi produces in the marketing year 2019-20.

So, the government’s claim is nowhere near 50% over C2 for the farmers. This is at the time when farmers from all over India are protesting and marching to the State or National capitals. And, the elections are just around the corner.

Nilesh Jain is a student of Master of Laws at Delhi University. He is also a researcher at Swaraj Abhiyan.


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