Bonanza For Farmers: Centre hikes MSP for Kharif crops, extends low-interest loans
New Delhi: The Union Cabinet on Wednesday approved a hike in minimum support prices (MSP) for 14 Kharif crops for the 2025-26 marketing season. The decision was taken by the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi. Union Minister Ashwini Vaishnaw said the MSP for paddy has been increased by Rs 69 per quintal, setting the new rate at Rs 2,369 for the season. Paddy (Grade A) will now fetch Rs 2,389 per quintal. The highest jump in MSP has been recommended for nigerseed, which sees an increase of Rs 820 per quintal. This is followed by ragi (Rs 596), cotton (Rs 589), and sesamum (Rs 579). Maize will now have an MSP of Rs 2,400, up from Rs 2,225.
Among oilseeds, the MSP for groundnut has been increased by Rs 480, sunflower seed by Rs 441, and soybean by Rs 436.For pulses, the MSP for tur (arhar) and moong has been increased by Rs 450 and Rs 86, respectively, while urad has seen a hike of Rs 400. These adjustments are part of the government's broader effort to support agricultural incomes and reduce rural distress. The revision comes ahead of the monsoon sowing season and is expected to influence crop choices among farmers.
The MSP serves as a safety net for farmers, ensuring that they get a minimum price for their produce, even if market prices fall. The changes will be effective from the upcoming Kharif season, which begins with the onset of the monsoon in June. Continuation of the Modified Interest Subvention Scheme (MISS) The Union Cabinet also approved the continuation of the Modified Interest Subvention Scheme (MISS) for the financial year 2025-26.
The scheme will continue with the existing 1.5% interest subvention for short-term loans provided to farmers. MISS is a central sector scheme that ensures affordable credit for farmers through the Kisan Credit Card (KCC). Under the scheme, farmers can get short-term loans of up to Rs3 lakh at a 7% interest rate. Out of this, 1.5% is subsidised by the government, making the loan cheaper for lending banks and institutions.
Additionally, farmers who repay their loans on time are eligible for a 3% Prompt Repayment Incentive (PRI).
This lowers their effective interest rate to just 4%. For those taking loans specifically for animal husbandry or fisheries, the benefit is applicable up to Rs 2 lakh.
No changes have been made to the structure of the scheme. It will continue as is, helping more than 7.75 crore KCC account holders across the country.
According to the government, continuing the support is crucial for keeping up the flow of institutional credit to the agriculture sector, especially for small and marginal farmers.
Over the years, credit through KCC has grown from Rs 4.26 lakh crore in 2014 to Rs 10.05 lakh crore by December 2024.
The overall agriculture credit flow increased from Rs 7.3 lakh crore in 2013-14 to Rs 25.49 lakh crore in 2023-24.
To make the process more efficient, the government also launched the Kisan Rin Portal in August 2023, which has made claim processing faster and more transparent.
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