CACP Price Recommendation and Cost of Production
The Government of India declares the Minimum Support Price (MSP) for Paddy (Common) and Paddy (Grade A) before the onset of the Kharif sowing season.
Under the national pricing policy, MSP is pegged at a minimum of 1.5 times the all-India weighted average Cost of Production (A2+FL), encompassing paid-out expenses on seeds, fertilizers, fuel, irrigation, and imputed family labor.
- Price categories: Distinct rates declared for Paddy (Common) and Paddy (Grade A) varieties
- Statutory body: Commission for Agricultural Costs and Prices (CACP) submitting comprehensive price reports
- Formula benchmark: Minimum 50 percent profit margin over comprehensive A2+FL cost of cultivation
- Cabinet approval: Formally approved by the Cabinet Committee on Economic Affairs (CCEA)
Fair Average Quality (FAQ) Standards for Paddy Procurement
Government procurement conducted by the Food Corporation of India (FCI) and state agencies operates under strict Fair Average Quality (FAQ) parameters.
Paddy lots brought to APMC purchase centers must meet moisture, foreign matter, and broken grain thresholds to qualify for full MSP settlement.
- Moisture threshold: Maximum permissible moisture content is 17.0 percent (lots with higher moisture must be sun-dried)
- Foreign matter: Inorganic foreign matter capped at 1.0 percent; organic matter capped at 1.0 percent
- Damaged & discolored grains: Capped at maximum 5.0 percent
- Immature and shriveled grains: Maximum permissible limit of 3.0 percent
Farmer Registration, Mandi Centers, and DBT Settlement
To participate in MSP procurement, farmers must register online on their state food and civil supplies portal (e.g. e-Uparjan in MP, Meri Fasal Mera Byora in Haryana, Anaaj Kharid in Punjab).
Following electronic biometric authentication at the mandi purchase center, procured grain weights are recorded, and payment is transferred directly into the farmer's Aadhaar-linked bank account via Direct Benefit Transfer (DBT).
- Pre-season registration: Register land acreage, bank details, and expected yield on state e-procurement portals
- Slot booking: Schedule convenient mandi visit dates to prevent long queues at procurement yards
- Electronic weighbridge: Computerized weighing slips generated automatically upon truck unloading
- DBT payment: MSP funds credited directly into bank accounts within 48 to 72 hours of procurement
Official source
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Common questions
What is the maximum moisture content allowed for paddy procurement under MSP?
Under official Fair Average Quality (FAQ) standards, the maximum permissible moisture content for paddy is 17 percent.
Which government agency conducts paddy MSP procurement in India?
The Food Corporation of India (FCI) along with state civil supplies corporations and marketing federations conduct paddy procurement.
How do farmers receive payment for grain sold at MSP?
Payments are transferred directly into the farmer's verified Aadhaar-linked bank account via Direct Benefit Transfer (DBT) within 48 to 72 hours.
General guidance, not personal advice. For your farm, ask your local Krishi Vigyan Kendra or agriculture officer.
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