The Centre has hiked state-determined prices of key crops by 8% to 17%, especially of lentils and oilseeds for the second straight year - a move aimed at increasing output of deficit commodities and raising farmers' income to match higher inflation.
Higher farm output will help the Centre meet enhanced requirements under the proposed food security bill. But the raises can increase food prices.
Minimum support price (MSP) is the assured price the Centre offers to farmers which also serve as the base price for private traders, thus helping avoid less-profitable sales.
Support prices have a direct bearing on farmers' choice of crops. Higher MSPs for wheat and rice had caused growers to shift away from oilseeds and lentil farming in recent years, one of the reasons for shortages.
With considerable price hike, the trend is reversing, helping the pulse and oilseeds production increase by 5 million tonne and 3 mt last year.
Support prices for commonly consumed rice has been raised to Rs 1080, a rise of 8%.
The MSP for tur and urad - key varieties of pulses - have gone up by 6% and 13% to reach Rs 3200 and Rs 3300 a quintal respectively.
Additionally, lintel growers will get Rs 500 a quintal as bonus.
MSPs, critical to India's farm sector and food security, are recommended by the Commission for Agricultural Cost and Price.