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Wheat Minimum Support Price (MSP) for 2024-25 Rabi Season Increased

  • 20 Oct 2023

On 18th October, 2023, the Central government raised the Minimum Support Price (MSP) for wheat by Rs 150 per quintal, marking a significant increase of 7.06 percent.

  • The new MSP for wheat, a staple food in India, will be Rs 2,275 for the upcoming 2024-25 rabi marketing season, beginning in April.

Key Points

  • Record-Breaking Increase: This hike in wheat MSP is the most substantial government came into power in 2014.
  • Political Timing: The decision to increase the MSP comes ahead of Assembly elections in five states, including Madhya Pradesh and Rajasthan, both of which are prominent wheat-producing regions.
  • Wheat Reserve Buildup: The sharp increase in MSP also signals the government's intention to bolster its declining wheat reserves in preparation for the upcoming crop season.
  • This strategic move aims to prevent potential price spikes during an important election year.
  • Boosting Masoor Production: In addition to wheat, the MSP for masoor, a vital crop, has been increased by Rs 425 per quintal to Rs 6,425 for the 2024-25 season.
  • Importance of Masoor: India is one of the world's largest importers of masoor, consuming 2.2-2.4 million tonnes annually.
  • About 70-80 percent of masoor imports come from Canada, a country with which India has had strained diplomatic relations lately.
  • Australia has also become a source for masoor imports by Indian traders.
  • Impact on Diversification: These higher MSPs for rabi crops are expected to support fair prices for farmers and encourage diversification in crop production.
  • While prices for commodities like wheat, pulses, and sugar have been on the rise due to limited supply, the increase in MSP is not expected to contribute to inflation.
  • Farmers' Motivation: The substantial MSP increase for wheat is expected to motivate farmers to cultivate more of this crop in the upcoming rabi season, considering the current high rates.
  • Similarly, mustard and masoor may see increased cultivation due to these significant MSP adjustments.
  • Record Horticulture Crop Output: The horticulture crop production for the 2022-23 season is projected to reach a record 352 million tonnes, a 1.44 percent increase from the previous season. This marks a significant rise in horticulture crop production in India.