Here is how the govt is trying to prevent a cheaper thali turning into farmer distress
Low food prices are good for the consumer, but not so much for the farmer. Market prices of farm products remain below minimum support prices in many states, and the government wants to prevent panic sales during the coming procurement season.
The Centre is working on a contingency plan to prevent distress sales during the ongoing procurement season, at a time when crop prices have slipped below the minimum support price (MSP) in many states.
Officials from the agriculture ministry, department of food and public distribution and Niti Aayog are discussing the low prices of oilseeds, onion, wheat, rice and pulses that have kept retail inflation below 2%, two people aware of the matter said. The officials have discussed increasing procurements to protect farmer incomes, the people said, following the steep disinflation in the prices of pulses and oilseeds this year, following a sharp surge in FY24.
“The fall in prices of essential commodities below MSP is a cause of concern for the government. We are discussing the issue with the concerned departments to work out a plan to ensure that farmers are not affected by the distress in pricing," said one of the two people mentioned above.
Double-edged sword
While low inflation benefits consumers, it can adversely affect rural incomes if farmers are forced to sell below the benchmark procurement price. The development assumes significance given that around 42% of India’ population depends on agriculture for livelihood, with the sector accounting for 18% of India's GDP.
“Besides assured procurement at the MSP, the plan is expected to include supportive measures such as facilitating the export of farmers’ produce to international markets and covering part of the losses arising from the current price slump," said the second person, adding that the plan is at discussion stage.
All-India mandi prices of most oilseeds and pulses are currently below their MSP. As of 23 October, the average wholesale price of soybean stood at ₹3,932 per quintal, well below its 2025-26 MSP of ₹5,328 per quintal. Groundnut was trading at ₹5,693 per quintal against an MSP of ₹7,263, while sunflower was priced at ₹5,697 per quintal compared to an MSP of ₹7,721.
Among pulses, moong was sold at ₹8,259 per quintal, slightly below its MSP of ₹8,768, while tur traded at ₹6,579 per quintal, significantly under its MSP of ₹8,000. The reversal is notable, as pulses had seen a sharp price surge in 2023-24, prompting the government to impose several measures to cool prices and curb hoarding.
As per the market trend, cotton prices have dropped to ₹5,500–7,200 per quintal compared to the MSP of ₹7,710 (medium-staple) and ₹8,110 (long-staple); urad is being sold at ₹6,069 below its MSPs of ₹7,800/quintal. Also, paddy prices in several states are hovering around ₹1,800–2,000 per quintal, below the MSP of ₹2,300 per quintal, as per the reports.
Queries emailed to the ministries of agriculture, consumer affairs and Niti Aayog remained unanswered.
"Since most of the pulses and oilseeds are trading much below the MSP, the government must intervene and ensure that the farmers get the required MSP as it will not only protect their income but also ensure food security," said Devender Sharma, a food and agricultural policy analyst.
Measures
“As our agriculture is totally dependent on the monsoon, the government should consider reviewing its import policies at least every six months. There should not be a blanket allowance for the import of pulses, as this is crashing the prices of all major varieties including tur, masoor, and chana," said Ramesh Chandra Lahoti, past president of the Federation of Karnataka Chambers of Commerce and Industry (FKCCI). “African tur is being sold at around half the rate of Indian tur; so, how can our own crop, which has an MSP of ₹80 per kg, compete? These are the key concerns the government should address to protect farmers’ interests," said Lahoti.
India’s retail inflation has stayed well below the central bank’s comfort level of 2-6% for five straight months, reflecting subdued price pressures across key food and fuel categories. Consumer Price Index (CPI) inflation eased from 2.82% in May 2025 to 2.10 % in June, further softening to 1.55 % in July.
It edged up slightly to 2.07% in August before dipping again to 1.54% in September, according to official data. The sustained moderation was largely supported by stable prices of cereals, pulses, and edible oils.
- Centre plans to prevent farm distress sales as crop prices fall below MSP.
- Low retail inflation benefits consumers, yet significantly hurts essential rural farm incomes and livelihoods.
- Plan includes higher procurement, export facilitation, and compensating farmers for current price slump losses.
- Most oilseeds and pulses are trading well below their MSP, violating price benchmarks.
- Reviewing pulse import policies is critical because current allowances are crashing domestic crop prices.
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