Supreme Court Issues Notice On Farmers' Plea Seeking MSP Fixation Based On Actual Cost Of Cultivation

The Supreme Court on Monday issued notice on a public interest litigation seeking directions to the Union Government to accord effective weightage to the exact cost of cultivation, known as C2, proposed by respective State Governments while fixing the Minimum Support Price for agricultural produce.A Bench comprising Chief Justice of India Surya Kant and Justice Joymalya Bagchi heard submissions from Advocate Prashant Bhushan, who argued that the issue was critical for farmers across the country, pointing to large numbers of farmer suicides and inadequate procurement mechanisms. He contended that MSP is often fixed even below the comprehensive cost of cultivation and that procurement at MSP is significant only for crops such as wheat and rice, leaving farmers cultivating other crops in acute distress.Bhushan clarified that the petition does not seek payment of cost plus 50 percent profit margin, but only the actual cost of cultivation, referred to as C2. He submitted that these calculations are already made by the government itself, and that farmers should at least be assured recovery of the full cost incurred. He further argued that welfare measures such as free ration schemes should not come at the expense of ensuring that farmers receive remuneration covering their production costs.During the hearing, the Chief Justice observed that difficulties may arise particularly in assessing components such as the cost of land and capital, as these may vary significantly from State to State. Justice Bagchi remarked that the relief sought would effectively require the Court to re-write economic policy. Bhushan responded, "It's fine for the government to give ration for free. That should not mean that effect on farmers is such that they do not get cost also...as a result of which they are committing suicide."The petition, filed by three Maharashtra-based farmers (Prakash Gopalrao Pohare, Purushottam Gawade and Vishal Omprakash Rawat), under Article 32 of the Constitution, seeks a direction to the government to fix MSP at least at the weighted average cost of production (C2) and to ensure procurement of crops from farmers at that price.According to the petitioners, Indian farmers are facing a severe financial crisis because they are often unable to sell their produce even at the actual cost of production, resulting in widespread distress and suicides. The petition cites data indicating that more than seventeen thousand farmers have committed suicide in Maharashtra alone in the last five years.The petition explains that the comprehensive cost of cultivation, termed C2, includes actual input costs, imputed value of family labour, rental value of owned land, rent paid for leased land, and interest on working capital. It contends that the present MSP methodology is largely based on A2+FL (paid-out costs plus family labour) multiplied by 1.5, thereby excluding key components such as land and capital costs and understating the true economic cost borne by farmers.It is further alleged that procurement at MSP is significant mainly for wheat and rice, while most other crops are not procured even at the declared MSP, aggravating financial distress among farmers. The petition also raises concerns that subsidised distribution of wheat and rice under the Food Security framework has distorted agricultural markets and depressed demand for other crops such as millets.The petitioners therefore seek directions to align MSP with the government's own calculated comprehensive cost of production and to establish adequate procurement infrastructure to ensure effective purchase of crops at that price.Related- Supreme Court Urges Centre To Revisit Yellow Dal Import Policy; Says Farming Of Pulses Be IncentivisedCase : PRAKASH GOPALRAO POHARE Vs UNION OF INDIA | W.P.(C) No. 384/2026Click Here To Read/Download Order

Supreme Court Issues Notice On Farmers' Plea Seeking MSP Fixation Based On Actual Cost Of Cultivation

Debby Jain

The petitioners contended that the present MSP methodology is largely based on A2+FL (paid-out costs plus family labour), ignoring land costs and interest on working capital.

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