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Poor prices for rabi crops at markets bode ill for farmers

Arrivals of wheat, mustard and other major rabi crops at mandis during the first two weeks of April were more than 90% lower than in the previous year, according to an analysis by research and ratings agency CRISIL.


However, increase in the prices have not been very high boding ill for farmers. Fruit farmers have been hit the hardest with prices actually down 9%, despite 85% fall in arrivals.

The impact of the coronavirus (COVID-19) crisis on the rabi or winter season harvest has been brutal, despite government efforts to facilitate agricultural activities. The CRISIL research showed that only one lakh tonnes of major rabi crops — wheat, gram, rapeseed and mustard — arrived in mandis between April 1 to 12, 98% less than the 51 lakh tonnes that arrived in mandis during the same period in 2019.


“While there are four primary reasons for this — delayed rabi harvest, labour shortage, lack of transport, and reduced mandi operations — grains are also said to be hoarded by farmers/traders to be sold at a later date when mandi operations and logistics normalise,” said CRISIL. The main wheat producing areas of Punjab and Haryana had not yet begun harvesting during this period.

Mandi prices for these crops were about 29% higher than the previous year. “Going forward, bumper crop output, lower industrial demand and limited exports [will] exert downward pressure on wheat prices,” said the analysis.

The arrivals of pulses and oilseeds were also 93% lower than the previous year, while prices were 28% higher. The situation is slightly better with regard to winter paddy and coarse grains with a 68% drop in arrivals. However, prices are also down about 2%, due to a drop in demand for coarse grains from industries and animal and poultry feed manufacturers.

Jute and cotton arrivals have plummeted 99%, but prices have also dropped 31% due to lower demand.

Fruit prices have also dropped 9% at the mandi, though the quantity of arrivals is 85% lower than the previous year. The lockdown has prevented exports of seasonal fruits such as mangoes and grapes, and also limited domestic demand, said CRISIL.

Vegetable prices rose sharply during this period increasing 83% at the mandi, even as arrivals dropped 75% due to restricted market access by farmers. However, CRISIL said farmers were not likely to be receiving much benefit from the increased prices that consumers are paying, as “middlemen are estimated to be procuring at much lower prices from farmers given their limited bargaining power due to the perishable nature of commodities”.

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