The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, approved the Minimum Support Prices (MSPs) for Kharif Crops of 2015-16 season. The decision is based on recommendations of Commission for Agricultural Costs and Prices (CACP) for the Price Policy for Kharif Crops for the Marketing Season 2015-16. CACP takes into account the cost of production, overall demand-supply, domestic and international prices, inter-crop price parity, terms of trade between agricultural and non-agricultural sectors, the likely effect of the Price Policy on the rest of economy, besides ensuring rational utilization of production resources like land and water, while recommending MSPs.

Accordingly, the MSP for cotton has been raised by INR50 per quintal for 2015-16 season. The MSP for medium staple cotton has been raised from INR3,750 a quintal to INR3,800 a quintal and that for long staple from INR4,050 to INR4,100 per quintal. The new prices will come into effect from 1 October 2015 and is expected to give a strong price signal to farmers to increase acreage and invest for increase in productivity of pulses.

The CACP being the expert body, its recommendations are generally accepted as such. However, in view of a large surplus of cereals in contrast to huge deficit of pulses, the Cabinet made an exception and decided to give a bonus of INR200 per quintal for pulses over and above the recommendations of the CACP.