As the nationwide lockdown enters its second month, farmers have been at the receiving end with disrupted supply chains, problems in harvesting rabi produce and a sharp drop in demand as people stayed indoors.
The supply chain disruption has meant that arrival of commodities across the nation’s main mandis remained a cause of concern.
According to government data, the all-India average wholesale price of major commodities in April showed a mixed trend, compared to the corresponding period in 2019.
While the average wholesale prices of wheat, mustard, tomatoes and bananas were lower than last year, those of potatoes and onions were more than in April 2019. (See chart)
One reason for mandi prices of some commodities being higher than last year could be that supplies were lesser, which meant that though prices were higher growers didn’t benefit uniformly.
There were also significant state-level variations in prices as well particularly in commodities where state procurement was underway.
So, for example, in the case of mustard, the data showed that in April, the all-India average wholesale price was Rs 4,506.98 per quintal, which was more than the Minimum Support Price (MSP) of Rs 4,425 a quintal for 2020-21, but farmers in Rajasthan and Madhya Pradesh didn’t get the MSP rates, where the average mandi price ruled at Rs 3,801.4 a quintal and Rs 3,783.95 a quintal, respectively.
This price though was nearly 24 per cent lower than the average price for April 2019. Haryana was the only state where mustard sold at MSP on average, according to the data.
For wheat, too, the data showed that the national average wholesale price was Rs 1,971.12 per quintal, higher than the MSP of Rs 1,925 a quintal, but this price was almost 2 per cent less than the same period last year and also lower than March 2020.
In the case of perishable items, the data showed that average wholesale price of potatoes was almost 48 per cent more than a year ago and 28 per cent more than March 2020.
Average wholesale price of onion was 13 per cent more than last year, but about 26 per cent less than in March. Tomato prices, meanwhile, crashed in April, compared to last year, and were around 39 per cent lower.
“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 prices of grapes might have been shown a marginal increase, but that was because supplies didn’t arrive.
“Potatoes and onion constitute a big chunk of mandi arrivals and their prices have remained more than last year, but it will take time for this to translate into actual income gains for farmers because studies show that any fall in price leads to immediate drop in incomes but rise takes time to translate,” NITI Aayog member Ramesh Chand told Business Standard.
Chand said a few days ago that data showed that average wholesale price of wheat, gram, rapeseed, potato and onion were higher than last year, which could ensure that farmers invest more in the coming weeks.