Plunging Food Prices Threaten Farmers' Incomes in CY25 Kharif Season

A report by Elara Securities highlights significant declines in rural cultivation incomes during the CY25 Kharif season due to lower food prices. Factors such as excessive monsoon, policy measures, and import expectations contributed to mandi prices falling below the Minimum Support Prices for key crops, impacting farmers' earnings sharply.

In a troubling revelation for the farming community, a report by Elara Securities has shed light on the financial strain experienced by farmers during the CY25 Kharif season. A sharp decline in food prices has resulted in substantial reductions in rural cultivation incomes, as per the report.

The Kharif season, primarily harvested in October and November, saw farmers grappling with weak price realization for key crops, with mandi prices plummeting below the established Minimum Support Prices (MSP). This decline was predominantly triggered by a slew of factors, including excess monsoons that impaired crops, delayed harvesting, quality concerns, and insufficient government measures to stabilize prices, as outlined in the report.

Policy decisions further complicated the picture. The enactment of duty-free imports for critical crops like cotton, tur, and urad, coupled with a reduction in customs duty on essential oils, exacerbated the slide in mandi prices. The report points to significant deflation in food crop prices, positioning it as one of the worst in recent history, which could reverberate through rural consumption patterns.