Kharif crop cultivation costs surge over five years: bajra, urad and moong see sharpest rise

Cost of cultivating Kharif crops in India has increased significantly over the past five years, driven by rising prices of seeds, fertilizers, pesticides, labour and other farm inputs. While the government has raised the Minimum Support Price (MSP) for the 2026-27 marketing season, the increase has not kept pace with production costs for several major crops. Agricultural experts believe this gap could put pressure on farmers' profitability despite higher support prices.

Bajra, Urad and Moong Record the Sharpest Cost Escalation:

Between 2021-22 and 2026-27, Bajra (Pearl Millet) witnessed the highest increase in cultivation cost among major Kharif crops. Bajra: Production cost increased from ₹1,858 to ₹2,900 per quintal, a rise of 53.17%. Urad: Cost climbed from ₹3,816 to ₹5,418 per quintal, up 41.98%. Moong: Production cost rose from ₹3,886 to ₹5,496 per quintal, registering a 41.43% increase. Maize: Cost increased from ₹3,460 to ₹4,630 per quintal, up 33.81%. Paddy: Production cost rose from ₹1,635 to ₹2,150 per quintal, an increase of 31.50%. 
Other crops also recorded notable increases, with Groundnut, Tur (Arhar), Soybean and Jowar experiencing steady growth in production costs over the same period.

Five-Year Increase in Production Cost of Major Kharif Crops:

Moong Offers the Highest Expected Returns under Revised MSP:

Union Government has increased the Minimum Support Price (MSP) for Kharif crops for the 2026-27 marketing season with the objective of ensuring farmers receive at least 1.5 times the all-India weighted average cost of production. Moong offers an expected return of 61% over production cost. Bajra and Maize are expected to provide returns of 56%. Tur (Arhar) is estimated to deliver a 54% return. 

The government believes the revised MSP will encourage cultivation of pulses, oilseeds and millets (Shree Anna), support crop diversification, strengthen nutritional security and improve farm incomes. It also notes that procurement volumes and MSP payments to farmers have increased substantially over the past decade.

Cost Growth vs MSP Growth: Mixed Picture across Crops:

A comparison of production cost and MSP growth over the last five years shows that MSP increases have not matched rising cultivation costs for several crops.

The data indicates that while crops such as Maize and Tur have seen MSP growth outpace production costs, Bajra, Urad, Paddy and Groundnut continue to face a widening gap between rising input expenses and support price revisions.

Experts Seek MSP Based on Comprehensive Cost of Cultivation:

Agricultural economists point out that MSP is currently calculated using the A2+FL formula, which includes paid-out expenses and the imputed value of family labour. However, many experts argue that MSP should instead be based on the C2 cost, which also accounts for land rent, interest on fixed capital and other indirect expenses. They believe adopting the C2 methodology would provide a more realistic measure of cultivation costs and offer stronger income security to farmers amid rising agricultural input prices.

MSP Growth over the Last Five Years:

FAQs:

Q1. Which Kharif crop recorded the highest increase in cultivation cost?
Answer: Bajra recorded the highest increase in cultivation cost over the last five years, rising by 53.17%.

Q2. Which crop offers the highest return under the revised MSP 2026-27?
Answer: Moong is expected to provide the highest return, around 61% over its production cost.

Q3. Why are Kharif cultivation costs increasing?
Answer: Rising prices of seeds, fertilizers, pesticides, labour and other farm inputs have significantly increased cultivation costs.

Q4. What is the difference between A2+FL and C2 cost?
Answer: A2+FL includes paid-out costs and family labour, while C2 also includes land rent, interest on fixed capital and other indirect expenses.

Q5. Why do experts want MSP to be based on C2 cost?
Answer: Experts believe the C2 formula reflects the actual cost of farming more accurately and provides better income security to farmers.