Farce in the Name of Remunerative MSP

Press Note released in the press conference at 12 pm on 9 October 2025 at Press Club of India, New Delhi:

According to the Second Advance Estimates of Production for 2024–25, farmers cultivating the 20 major Kharif and Rabi crops could have earned nearly ₹3 lakh Crore Rupees more if their produce had been procured at prices determined by the Swaminathan Commission’s recommended formula of *C2 + 50%.(see table -1).

20 crops include paddy, cotton, soybean, maize, groundnut, wheat, gram, arhur (tur), rapeseed, jower, urad, moong, bajra, lentil, ragi, sesamum, barley, sunflower, safflower, nigerseed.

Considering the crops including milk, entire commercial crops, vegetables, fruits, meat, egg, fish etc. out of the current MSP system and procurement , the losses Indian peasantry suffers is manifold higher, leading to indebtedness, suicides daily on an average of 31 farmers; all this is to ensure  corporate profit under the corporate -communal BJP led NDA regime.

Over the last nine years (2016–2025), farmers growing these 20 crops have collectively lost an estimated ₹24 lakh crore in income solely because the C2 + 50% formula was not implemented, even under the assumption that the entire production was procured at the official Minimum Support Prices (MSP) which is unreal.

A significant number of farmers sell their produce below MSP, particularly in regions without an effective mandi (procurement) system, meaning that the actual scale of farmers’ losses is far greater than what the figures suggest.

Among the 20 crops, Paddy, being the most widely cultivated crop, accounts for the largest losses — approximately ₹97,000 crore in 2024–25 alone, and over ₹7 lakh crore cumulatively during the last nine years.

In Bihar, where elections were just announced, paddy, wheat, and maize farmers together have lost around *₹10,000 crore in 2024–25 due to the non-implementation of the C2 + 50% pricing formula. Over the nine-year period, their cumulative income loss is estimated at ₹71,000 crore. The actual figure is likely to be much higher, given the widespread inefficiencies in procurement and limited MSP coverage as the Mandi system had been closed down in 2006 by the Chief Minister Nitish Kumar.

PM-Kisan Scheme: Another betrayal of farmers

As of early August 2025, over ₹3.90 lakh crore has been disbursed to farmers under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme. This total includes the release 20th installment (August 2, 2025) of ₹20,500 crore to over 9.7 crore farmers, 19th instalment (February 24, 2025) of ₹22,000 crore to more than 9.8 crore farmers and 18th instalment (October 5, 2024) of ₹20,000 crore provided to more than 9.4 crore farmers. The scheme was announced in 2019 and implemented with retrospective effect from 2018. The scheme provides an annual income support of ₹6,000 to eligible farmer families paid in three equal instalments of ₹2,000 each, disbursed every four months.

If the MSP@C2+50% had been implemented, then farmers cultivating 20 crops alone would have earned ₹19 lakh Crore so that an amount of ₹11 lakh Crore could have been retained even after gifting ₹7.80 lakh Crore to PM Modi.

The farmers of the country have seen the repeated betrayals by the Prime Minister Narendra Modi for 11 years since 2014. In 2016 the PM had announced to double the farmers’ income by 2022; but failed miserably but ‘succeeded’ to double the cost of production and manifold increase in the assets of the corporate companies.

AIKS calls upon all its units across the country to expose the Modi led BJP-NDA Government undertake campaigns in the villages and rise in protest against this betrayal.   

Sd/-

Ashok Dhawale
President

Vijoo Krishnan
General Secretary

Sources

Production data: Unified Portal for Agricultural Statistics. Directorate of economics and statistics. Department of agricultural and farmer’s welfare.

MSP, and cost of production( A2+FL and C2) : Commission for Agricultural Costs and Prices (CACP). Price policy reports. All data has been collected from government of India’s official documents

Note:

A2+FL and C2 are different measures of the cost of production used to calculate the Minimum Support Price (MSP) in India. A2+FL Cost: This includes all direct expenses incurred by the farmer (cash and kind), such as seeds, fertilizers, pesticides, hired labor, fuel, and irrigation, plus the imputed value of unpaid family labor. The government currently calculates MSP based on 1.5 times the A2+FL cost.

C2 Cost: This is a more comprehensive measure that includes all the costs in A2+FL, along with imputed rental value of owned land, interest on owned fixed capital, and rent paid for leased-in land.  Government’s justification: The government maintains that it fixes MSPs at a level of at least 1.5 times the A2+FL cost of production, meeting its commitment to a 50% margin, but from a different, less comprehensive cost calculation.

* data analysis by the Research wing of P Sundarayya Memorial Trust, New Delhi – 

Table 1:  MSP difference crop wise 2024-25

Table 2: MSP loss year wise

Table 3: Paddy MSP year wise farmer’s loss

Table 4*: Crop wise farmer’s loss in Bihar

*This data is from the 2024-25 financial year’s wheat, paddy, and maize production in Bihar. From this, we can see that almost 10,000 crore rupees worth of production has been taken away from the farmers by not implementing the C2+50 percent formula. And that is assuming the farmers are receiving at least the Minimum Support Price.

Table 5: Rabi crop 2026-27 MSP and farmer’s loss

Table 5**: Bihar farmers loss year wise

**In the last nine years (2016–2025), wheat, rice, and maize farmers in Bihar have lost ₹71,000 crore in incomes due to the non-implementation of the C2+50 formulas in calculating MSP