A Bench comprising Chief Justice of India Surya Kant and Justice Joymalya Bagchi has issued notice to the Union Government on a public interest litigation seeking a direction that Minimum Support Price for agricultural produce be fixed giving effective weightage to the C2 cost of cultivation formula — the more comprehensive cultivation-cost methodology proposed by state governments that accounts for imputed costs like the farmer's own land rent and family labour, rather than the narrower A2+FL formula the Centre has generally relied on.
Arguing the petition, Advocate Prashant Bhushan pressed the point that the choice of cultivation-cost methodology is not a mere technical accounting question but has direct, material consequences for farmer income and livelihood — pointing to the continuing prevalence of farmer distress and inadequate procurement mechanisms as evidence that the current MSP-setting approach is failing to deliver the income protection it is meant to provide.
The A2+FL versus C2 debate has been a central, recurring fault line in Indian agricultural policy for years, tracing back at least to the recommendations of the National Commission on Farmers, which had specifically recommended the more comprehensive C2 methodology as the appropriate baseline for MSP calculation. Successive governments have generally continued to rely on the narrower A2+FL formula — covering actual paid-out costs plus an imputed value of family labour, but excluding the imputed cost of the farmer's own land and fixed capital — a choice that farmer organisations have consistently argued understates the true cost of cultivation and, correspondingly, sets MSP levels below what is needed to provide meaningful income security. The petition now before the Supreme Court squarely reopens this long-running methodological dispute in a judicial forum, after years of it playing out primarily in policy and political debate.
The MSP-fixation methodology has been a live flashpoint in Indian agricultural policy for years, closely tied to the broader farm-law debates of the preceding several years. With notice now issued, the Centre will need to formally defend its current cost-of-cultivation methodology before the Court — a proceeding that agricultural businesses, procurement agencies, and farmer bodies will be watching closely, given how directly any change to the MSP formula would ripple through procurement costs and pricing across major crops. Agribusinesses with significant exposure to MSP-linked procurement — including cooperative societies, food processing companies sourcing from MSP-regulated crops, and state procurement agencies — should begin scenario-planning for the financial impact of a potential shift toward the C2 methodology, given the scale of the price increase that shift would likely represent across major staple crops.