Economy
Minimum Support Price: How It Is Fixed
Ahead of rabi sowing, a refresher on the CACP, cost concepts and the debate over a legal guarantee for MSP.
1 min readPrelimsGS Paper III
Why is this in the news?
MSP announcements for rabi crops are expected before the sowing season.
Who recommends MSP?
The Commission for Agricultural Costs and Prices (CACP) recommends MSPs. The final decision is taken by the Cabinet Committee on Economic Affairs (CCEA).
Cost concepts
| Cost | Includes |
|---|---|
| A2 | Actual paid-out costs: seeds, fertiliser, hired labour, fuel, irrigation |
| A2 + FL | A2 plus the imputed value of family labour |
| C2 | Comprehensive cost including rent on owned land and interest on fixed capital |
MSP is announced for 22 mandated crops, along with the Fair and Remunerative Price (FRP) for sugarcane.
TagsAgricultureMSPCACP
All current affairs for 13 September 2026