The increase in MSP for the 2025-26 kharif season and the continuation of the Modified Interest Subvention Scheme reflects a strategic effort to provide economic stability and support to farmers. These initiatives come at a critical time as the monsoon is predicted to arrive early, enabling timely sowing of crops that contribute to over half of India’s annual foodgrain production. The MSP hike, though modest for paddy (a 3% rise to Rs 2,369 per quintal), is more generous for oilseeds and pulses, which see increases of up to 9%. For instance, the support price for tur and urad has been increased by Rs 450 and Rs 400 per quintal respectively. At the same time, oilseeds like nigerseed and sesamum have witnessed the highest absolute increases at Rs 820 and Rs 579 per quintal. This shift signals a deliberate policy thrust to diversify agricultural production, reduce import dependency, and promote nutritional security through the cultivation of pulses and oilseeds.
Coupled with the continued rollout of MISS-allowing farmers access to affordable short-term credit-the Government’s approach addresses both income support and credit availability. Under MISS, farmers can access loans up to Rs 3 lakh at 7% interest, with an additional 3% Prompt Repayment Incentive, effectively reducing their burden to 4%. With over 7.75 crore Kisan Credit Card accounts in existence, this ensures widespread reach and impact.
These initiatives are crucial in ensuring assured returns to farmers. By pegging MSPs at least 1.5 times the all-India weighted average cost of production, as promised in the Union Budget of 2018-19, the policy aims to provide a reasonable income cushion. Crops like bajra and maize are expected to yield margins as high as 63% and 59% respectively-indicating the intent to push cultivation of “Shree Anna”, in line with the Government’s nutrition and sustainability goals. The continuation of interest subvention plays a vital role in sustaining the flow of institutional credit, particularly for small and marginal farmers who constitute the majority of India’s farming population. With credit disbursals through KCC having more than doubled since 2014, the scheme is a tool for financial inclusion and rural empowerment.
Despite these laudable efforts, several hurdles persist. MSP procurement is still highly skewed towards a few crops like paddy and wheat, and largely limited to states like Punjab and Haryana. Without a robust procurement and market infrastructure for pulses, oilseeds, and millets, farmers may not realize the announced MSPs on the ground. The challenge lies in implementation. Simultaneously, delays in payments and bureaucratic inefficiencies deter many farmers from selling to Government agencies. Without digitization, real-time monitoring, and better storage and transportation infrastructure, the intended benefits may not percolate evenly. Additionally, credit access, though expanded, often bypasses the most vulnerable. Tenant farmers and landless labourers, who form a sizable proportion of the agricultural workforce, are often excluded from institutional credit due to a lack of collateral and land ownership documents.
Effective implementation requires stronger coordination between the Centre and states, particularly in expanding procurement for pulses and oilseeds. Building farmer-producer organizations, local agri-marketing hubs, and e-market platforms like eNAM can bridge the gap between policy and practice. Technology, too, can be a game-changer. Satellite-based crop monitoring, AI-driven price forecasts, and digital land records can streamline MSP targeting and credit disbursal. Additionally, linking MSP announcements with real-time price dissemination through mobile platforms can empower farmers with timely decisions.
To move beyond MSP dependency and boost incomes sustainably, farmers must diversify. Integrating allied agricultural activities-such as dairy, poultry, fisheries, beekeeping, and agro-processing-can create additional income streams. Animal husbandry and fisheries are already covered under MISS for loans up to Rs. 2 lakh, encouraging diversification. Agri-tourism, floriculture, and medicinal plant cultivation are other emerging avenues. Furthermore, value addition through food processing, branding, and direct-to-consumer sales can exponentially increase earnings. Overall, the success depends on systemic reforms, digital empowerment, and grassroots execution. India’s agricultural future lies not just in policy, but in transforming farming into a resilient, diversified, and sustainable enterprise.
Follow our WhatsApp channel
