The price at which Centre will buy new-season wheat from farmers has been raised by 2% to Rs 2015 per 100 kg, which is lowest in a decade. India is the world's second-biggest wheat consumer. These prices are set keeping in mind the security of farmers, further attempting at covering their emergency needs and protecting them from distress sales.  

The minimum support price (MSP) for mustard seed has also been increased by Rs 400, reaching Rs 5,050 per quintal for the crop year currently. “The cost of production of wheat is estimated at ₹ 1,008 per quintal,” the centre said in a statement.

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MSP is the rate at which the government purchases grains from farmers. The government fixes MSPs for 23 crops usually grown in both kharif (summer) and rabi (winter) sowing seasons. 

This comes amid the ongoing farmer protests against three new farm laws that farmers claim could hurt their business by transferring control to private firms over agricultural produce.The farmers are adamant at wanting the withdrawal of laws and no amount of negotiation has been successful at satisfying them. 

The meeting of Cabinet Committee on Economic Affairs or CCEA chaired by Prime Minister Narendra Modi saw the materialisation of raise in MSP. 

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In a statement, the CCEA said it has “approved raising MSP for six rabi crops for the 2021-22 crop year (July-June) and 2022-23 marketing seasons”. The sowing of Rabi crops happens in October following the harvest of kharif crops. Furthermore, wheat and mustard make up for the two major rabi crops.

The CCEA said the MSP has been raised to “encourage crop diversification as the return to farmers over their cost of production are estimated to be highest in case of wheat, rapeseed and mustard, followed by lentil, gram, barley and safflower.”