Budget 2026: Farm Union Seeks All Crops under MSP, Calls for Higher Investment in Agriculture

Ahead of the Union Budget 2026-27, farmers have once again reiterated their demand to cover all agricultural crops under the minimum support price (MSP). Bhartiya Kisan Union (BKU) National General Secretary Chaudhary Yudhvir Singh said this has always been a key demand of farmers.

“We have always sought MSP for all crops, not just a few that the government currently covers,” Singh told Outlook Business. He added that while all political parties support this demand when in opposition, they often forget it once in power.

The BKU leader also emphasised that the agriculture sector needs higher investment to support the over 60% of the Indian population that still depends on it.

Currently, the government sets MSPs for about 22 crops, including 14 Kharif crops, six Rabi crops, and two commercial crops, to support farmer incomes. Sugarcane is covered under a separate mechanism called the Fair and Remunerative Price (FRP).

In Budget 2025-26, the Ministry of Consumer Affairs, Food and Public Distribution was allocated 4.3% of the central government’s budgeted expenditure. Of this, the Department of Consumer Affairs received ₹4,361 crore, while the Department of Food and Public Distribution, which ensures food security through crop procurement, storage, distribution of food grains, and regulates the sugar sector, was allocated ₹2,11,406 crore.

Food subsidies, which fund the supply of free food grains to 810 million people under the National Food Security Act, account for the majority of the ministry’s budget.

According to a Financial Express report, the Food Corporation of India (FCI), which accounts for over 70% of the government’s food subsidy, has revised its projected FY26 expenditure to ₹1.70 lakh crore, up from the budgeted ₹1.43 lakh crore. This covers 95% of the total subsidy estimate of ₹1.5 lakh crore.

So far in FY26, the Finance Ministry has released ₹86,517 crore to FCI, covering about 60% of the corporation’s estimated expenditure. FCI has also received a temporary ‘ways and means’ advance of ₹50,000 crore, which will eventually be adjusted against food subsidy allocations.

Sources told the publication that the additional bill is around ₹25,000 crore, but the food subsidy outlay may be increased by only ₹5,000 crore. Measures such as boosting open market sales, tapping into the Price Stabilisation Fund under the Bharat Rice retail scheme, and supporting state government programmes could help meet the demand for extra subsidy.

In FY26 so far, FCI has reportedly supplied 3.7 million tonnes (MT) of rice at ₹2,320 per quintal, while 2.7 MT of grain has been supplied to states at ₹2,250 per quintal. The economic cost of rice in 2025-26, including MSP, storage, and carrying costs, is estimated at ₹4,173 per quintal.

“The agri and allied sector budget in FY25 stood at ₹1.52 lakh crore and for FY26 at ₹1.37 lakh crore, with related budgetary spending in terms of MSP and input subsidy effectively over ₹3.91 lakh crore. This implies that the bulk of the budget is directed towards DBT and subsidies, rather than investment in farm mechanisation and infrastructure, which was limited to about ₹30,000 crore,” said Padmanand V, Partner at Grant Thornton Bharat.

He added that the upcoming budget is expected to be more rational, with greater allocation towards direct infrastructure spend through PPP and investment subsidies, aligning India more closely with practices in developed ecosystems such as the US and China.

“It is the investment multiplier, given the Incremental Capital Output Ratio (ICOR), that will lead to sustained and rapid growth in the agriculture sector. Therefore, there is a need for a considerable increase in investment spending in the budget, as opposed to the typical consumption-oriented spending on DBT, MSP support, and operational subsidies,” Padmanand V said.