Rural India is facing stress as prices of key agricultural commodities such as pulses have fallen sharply because of fresh supplies from farms and the government's robust measures to build stocks and control food inflation.
New Delhi/Pune: Rural India is facing stress as prices of key agricultural commodities such as pulses have fallen sharply because of fresh supplies from farms and the government's robust measures to build stocks and control food inflation.
Most farmers are facing losses in the rabi, or winter-sown, crop, which has started arriving in mandis. The worst hit are those who planted pulses as prices have plunged 20% below the support price in the case of tur dal. The price of many spices has fallen, while the usually pricey pomegranate is selling at the lowest level in a decade.
Onions are doing relatively better but farmers have planted so much of the crop that prices are likely to tumble in April, traders said. Jeera, coriander and oilseeds such as mustard are also expected to come under pressure, they said.
Farmers have faced a rough time in recent years: The summers own kharif crop was hit by two failed monsoons along with erratic rainfall in the last season. In this period, the winter-sown crop also suffered damage due to hailstorms and unseasonal rain after failed monsoon, magnifying farmer discontent.
Farmers and traders said the only way out was to heavily step up government procurement of grains and allow export of onions to support prices.
Agriculture minister Radha Mohan Singh agreed.
Last Season's Heavy Stocks to Blame for Situation
"Minimum support prices are increasing but now a serious issue is to ensure and focus on buying produce from farmers at MSP rate," agriculture minister Radha Mohan Singh told ET. He said the food ministry was working closely with states to ensure higher procurement.
Analysts blamed heavy stocks from the last season for the situation. "It's a seasonal thing that correction will happen ahead of the harvest season. However, due to a huge carryover stock with both traders and government, prices of wheat, mustard, pulses are already trading very low," said Prerana Desai, vice-president at Edelweiss Agri Research.
Desai said existing stocks and the arrival of the new crop had hit prices. "Chana and masoor harvest has started. There have been substantial imports and lack of export opportunity, resulting in the price fall. While masoor prices remain very close to a multi-year low, chana prices have now fallen to April 2015 levels," she said.
At the Indore mandi, new chana crop reaching the market is being quoted at 12% lower than the MSP of Rs 4,400 a quintal while masoor was 15% less than the MSP of Rs 4,250 a quintal, said traders. At the Latur APMC (Agricultural Produce Market Committee) in Maharashtra, tur prices are ruling lower than the MSP of Rs 5,450 a quintal by about 20%. With arrivals of chana to pick up, prices are expected to slide further. Read more
Most farmers are facing losses in the rabi, or winter-sown, crop, which has started arriving in mandis. The worst hit are those who planted pulses as prices have plunged 20% below the support price in the case of tur dal. The price of many spices has fallen, while the usually pricey pomegranate is selling at the lowest level in a decade.
Onions are doing relatively better but farmers have planted so much of the crop that prices are likely to tumble in April, traders said. Jeera, coriander and oilseeds such as mustard are also expected to come under pressure, they said.
Farmers have faced a rough time in recent years: The summers own kharif crop was hit by two failed monsoons along with erratic rainfall in the last season. In this period, the winter-sown crop also suffered damage due to hailstorms and unseasonal rain after failed monsoon, magnifying farmer discontent.
Farmers and traders said the only way out was to heavily step up government procurement of grains and allow export of onions to support prices.
Agriculture minister Radha Mohan Singh agreed.
Last Season's Heavy Stocks to Blame for Situation
"Minimum support prices are increasing but now a serious issue is to ensure and focus on buying produce from farmers at MSP rate," agriculture minister Radha Mohan Singh told ET. He said the food ministry was working closely with states to ensure higher procurement.
Analysts blamed heavy stocks from the last season for the situation. "It's a seasonal thing that correction will happen ahead of the harvest season. However, due to a huge carryover stock with both traders and government, prices of wheat, mustard, pulses are already trading very low," said Prerana Desai, vice-president at Edelweiss Agri Research.
Desai said existing stocks and the arrival of the new crop had hit prices. "Chana and masoor harvest has started. There have been substantial imports and lack of export opportunity, resulting in the price fall. While masoor prices remain very close to a multi-year low, chana prices have now fallen to April 2015 levels," she said.
At the Indore mandi, new chana crop reaching the market is being quoted at 12% lower than the MSP of Rs 4,400 a quintal while masoor was 15% less than the MSP of Rs 4,250 a quintal, said traders. At the Latur APMC (Agricultural Produce Market Committee) in Maharashtra, tur prices are ruling lower than the MSP of Rs 5,450 a quintal by about 20%. With arrivals of chana to pick up, prices are expected to slide further. Read more