UPSC Prelims Practice Questions — Cabinet approves Minimum Support Prices (MSP) for Rabi Crops for Marketing Season 2027-28

Q1. With reference to the cost concepts used when fixing agricultural prices in India, consider the following statements: Which of the statements given above is/are correct?

  1. The A2 cost includes rent paid for leased-in land and interest on working capital.
  2. For the same crop and season, an MSP set at 1.5 times the A2+FL cost can never exceed an MSP set at 1.5 times the C2 cost.
  3. The C2 cost differs from the A2+FL cost mainly because it adds rent paid for leased-in land.
  • A. 1 and 3 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 2 only

Q2. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. The percentage margin over cost cited for a crop in the Union Government's MSP announcements overstates the margin that a farmer cultivating his own land earns over the comprehensive (C2) cost of cultivation.
  2. The cost base used for the announced margin includes paid-out costs and the imputed value of family labour, but excludes imputed rent on owned land and interest on owned fixed capital.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q3. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. In a given year, the MSP of a crop can be raised by a smaller percentage than the rise in its cost of production without breaching the rule announced in the Union Budget 2018-19.
  2. The rule announced in the Union Budget 2018-19 requires the MSP of every mandated crop to be revised each year at least in proportion to the change in its cost of production.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q4. Consider the following facts. In Rabi Marketing Season 2027-28, the MSP of wheat, whose margin over cost of production is 106%, was raised by ₹25 per quintal. The MSP of safflower, whose margin is 50%, was raised by ₹675 per quintal, and that of rapeseed & mustard, whose margin is 96%, by ₹413 per quintal. Between 2014-15 and 2025-26, wheat made up about 3,715 LMT of the roughly 3,921 LMT of the six Rabi crops procured at MSP. Which of the following inferences can validly be drawn from the above?

  1. Safflower cultivation yields a higher profit per hectare than wheat cultivation.
  2. The size of a crop's annual MSP increase is not determined solely by its existing margin over cost.
  3. The increase in wheat's MSP was kept small because wheat's cost of production fell during the year.
  4. If the past procurement pattern holds, a given per-quintal change in wheat's MSP affects the outlay on Rabi procurement far more than the same change in any other Rabi crop's MSP.
  • A. 1 and 3 only
  • B. 1, 2 and 4 only
  • C. 2 and 4 only
  • D. 2, 3 and 4 only

Q5. The Union Government approved the MSPs for Rabi Marketing Season 2027-28 on 30 September 2026. The wheat to which these MSPs apply would ordinarily be:

  • A. sown in June–July 2027 and marketed from about October–November 2027
  • B. sown in March–April 2026 and marketed from about October–November 2026
  • C. sown in October–December 2027 and marketed from about March–April 2028
  • D. sown in October–December 2026 and marketed from about March–April 2027