The Centre has presented evidence of a larger and increasingly digitized procurement system, but has not provided a clear answer on whether it intends to convert MSP from a policy instrument into a legally enforceable right.

New Delhi, 27 Aug 2026 | Nirmesh Singh

The Centre has once again sidestepped the central question surrounding farmers’ demand for a legal guarantee of Minimum Support Price (MSP), responding instead with details of increased procurement, direct payments and digitization of the existing MSP procurement system.

In a written reply in the Lok Sabha during the recently concluded Monsoon Session, Minister of State for Agriculture and Farmers Welfare Ram Nath Thakur did not give a specific answer on whether the government has conducted any audit or review in the last five years to examine the feasibility of enacting a law guaranteeing MSP to farmers. Nor did the reply spell out whether the government considers a statutory MSP guarantee necessary to protect farmers from distress sales, quantify the losses allegedly suffered by farmers in the absence of such a legal framework, or provide any time-bound roadmap for bringing such legislation.

The questions were raised by Congress MP Deepender Singh Hooda, who had sought to know whether the government had undertaken any review in the last five years specifically to examine the feasibility of a law guaranteeing MSP and, if so, the details of such an exercise. Hooda also asked whether the government considered a legal guarantee important for farmer welfare and protection against distress sales; whether it had estimated the monetary losses suffered by farmers because of the absence of a legal MSP framework during the last ten financial years, including the current year, with State/UT-wise and year-wise details; and whether any time-bound roadmap had been prepared for implementing such a law.

Instead of directly addressing these questions, the government’s reply highlighted the existing MSP mechanism and various measures taken to strengthen procurement.

Thakur said the government fixes MSP every year for 22 mandated agricultural crops for the country as a whole, based on recommendations of the Commission for Agricultural Costs and Prices (CACP), after considering the views of State governments and concerned Central ministries and departments.

The minister also cited the Union Budget’s 2018-19 decision to follow a pre-determined principle of fixing MSP at least 1.5 times the all-India weighted average cost of production. Accordingly, the government has increased MSPs for all mandated Kharif, Rabi and other commercial crops from 2018-19 onwards, providing a minimum return of 50% over the stated cost of production.

The response also pointed to procurement under the Price Support Scheme (PSS) of Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA), under which the government procures produce when market prices fall below MSP, subject to the scheme’s guidelines and a request from the concerned State government. The government also implements the Market Intervention Scheme (MIS) for perishable agricultural and horticultural commodities that are not covered under PSS.

From the 2024-25 season, the government has introduced a Price Differential Payment (PDP) component under MIS, under which States and Union Territories can opt either for physical procurement or payment of the difference between the Market Intervention Price and the selling price to farmers for eligible perishable crops.

The minister further highlighted technological and administrative changes, including direct transfer of MSP payments into farmers’ bank accounts, Aadhaar and land-record linkage with procurement portals, biometric-based procurement and integration of digitized mandi and procurement-centre operations.

However, these measures do not directly answer the legal question raised by Hooda. An MSP announced by the government and a legally enforceable MSP are two different propositions. The former establishes the price at which the government is willing to procure under specified schemes and conditions; the latter would potentially create an enforceable obligation when farmers sell their produce in the market below the stipulated price.

The distinction assumes significance because the government’s procurement figures, while demonstrating a substantial expansion of its intervention, do not establish that all farmers growing MSP-covered crops are able to realize MSP for their produce.

According to the government, total procurement increased from 6,987 lakh metric tonnes during 2004-14 to 12,819 lakh metric tonnes during 2014-26, up to June 2026. The corresponding MSP value paid to farmers rose from ₹7.41 lakh crore to ₹27.80 lakh crore.

The Centre is using these numbers to underline the expansion of MSP procurement and the benefits reaching farmers. But the figures also leave unanswered the precise questions raised by Hooda: How many farmers are actually protected from selling below MSP? How much produce is sold below MSP? What is the estimated income loss arising from such sales? And what would be the fiscal and institutional implications of making MSP a legal entitlement?

The government’s response is therefore notable less for what it says about procurement than for what it does not say about a statutory guarantee.

It would be too broad to claim that the government has undertaken no review whatsoever on MSP in the past five years. A committee was constituted in 2022 to make MSP more effective and transparent, among other issues. But the sharper question raised by the parliamentary exchange is whether the government has completed and disclosed a substantive assessment specifically on the feasibility of a legal guarantee of MSP. The latest reply does not provide such an assessment or a clear legislative roadmap.

Legal MSP has remained one of the key demands of several major farmer organizations, particularly since the farmers’ agitation against the now-repealed farm laws. The government, meanwhile, has consistently defended the expansion of MSP and procurement rather than committing itself to a statutory guarantee.

The latest Lok Sabha reply again illustrates that gap. The Centre has presented evidence of a larger and increasingly digitized procurement system, but has not provided a clear answer on whether it intends to convert MSP from a policy instrument into a legally enforceable right.

For farmers seeking protection against distress sales, that remains the fundamental unanswered question.
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