As the nationwide lockdown enters its third month, farmers have been at the receiving end with frayed supply chains, problems in harvesting their rabi produce and a sharp drop in demand as people stay indoors.
A disruption in supply chain means that the arrival of commodities across the nation’s main mandis remained a cause of concern.
Data from agrmarket.gov.in shows that in April 2020, the all India average wholesale price of major commodities showed a mixed trend as compared to same month of 2019.
While the average wholesale price of wheat, mustard, tomatoes and bananas was lower than last year; that of potatoes and onions was more than April 2019.
One reason for mandi prices of some commodities being higher than last year could be that their supplies were less than last year, which means that though prices were more, growers didn’t benefit uniformly.
Not only this, there was also a significant state-level variation in prices, particularly in commodities where state-procurement was underway.
So for example, in case of mustard, the data showed that in April 2020, the All India average wholesale price was Rs 4506.98 per quintal, which was more than the Minimum Support Price (MSP) of Rs 4425 a quintal for 2020-21, but farmers in Rajasthan and Madhya Pradesh weren’t getting the MSP rates where the average mandi price in April 2020 ruled at Rs 3801.4 a quintal and Rs 3783.95 a quintal.
This price though, was nearly 13 per cent more than the average price for 2019 for April, but was lower than the state-declared MSP for this year.
Haryana, was the only state where mustard was selling at an MSP of Rs 4425 per quintal on an average as per the agmarket data.
In case of wheat, too, the data showed that the All India average wholesale price was Rs 1971.12 per quintal which was more than the MSP of Rs 1925 a quintal, but this price was almost 2 per cent less than the same period last year and also in comparison to March 2020.
In case of perishable items, the data showed that the average wholesale price of potato was almost 48 per cent more than the same month of last year and 28 per cent more than March 2020.
In case of onion, the data showed that though the average wholesale price was 13 per cent more than last year, but significantly prices were almost 26 per cent less than March 2020.
Tomato prices, meanwhile, have crashed in the month of April 2020 as compared to last year and are almost 39 per cent less.
“In case of tomatoes, the impact of distress sale is clearly visible because it can’t be stored for long while in other commodities the disruption in supply chain might have pushed up prices at the wholesale level, but that does not mean that it has translated into higher incomes for farmers,” said Mahendra Dev, director and Vice Chancellor of Mumbai-based Indira Gandhi Institute of Development Research.
He said in case of grapes, prices might have been showing a marginal increase but that is because supplies couldn’t come from fields.
“Potatoes and onion constitute a big chunk of mandi arrivals and their prices have remained more than last year but it will take time to translate into actual income gains for farmers because studies show that any fall in price leads to immediate drop in incomes for farmers but rise takes time to translate,” NITI Aayog member Ramesh Chand told Business Standard.
Chand, in a statement made few days ago, said that data with him showed that the average wholesale price of wheat, gram, rapeseed, potato and onion have been more than last year, which could ensure that in the coming weeks farmers will invest more in farming.