Red chillies most profitable for farmers, potato the least, shows RBI report

A farmer cultivating green chilli at Krishnapuram village in East Godavari district, Andhra Pradesh

A farmer cultivating green chilli at Krishnapuram village in East Godavari district, Andhra Pradesh  

Input costs for agriculture have been rising over the past few years, while food inflation has been declining.

This indicates that farmers are getting lower returns for some types of produce while investing more than before. An RBI survey shows that farmers get widely varying returns based on the crops.

The survey was conducted in December 2018 and covered 9,403 farmers, traders and retailers across 18 States.

Pricy investments

Wholesale Price Index, a measure of change in price over time, shows that the cost of investments by farmers has risen between 2016 & 2019.

image/svg+xml F G Electricity High speed diesel C D E Threshers Tractors Pesticide A B Cattle feed Diammonium Phosphate 180 158 136 114 92 70 Sept. 2016 Aug. 2019 G D E A C B F Wholesale Price Index

Poorer returns

However, Consumer Price Index, a measure of variation in prices paid by consumers, shows a general decline between 2016 and 2019.

image/svg+xml Pulses & products 3 -1 -5 7 11 15 Vegetables Milk & products CPI (food and beverages) Fruits The cost of pulses and vegetables has declined the most Apr. 2016 to Aug. 2019 Apr. 2012 to march 2016 CPI infation in %

Varying returns

A significant number of the farmers surveyed said that the selling price was lower than the cost price across most crops (except fruits).

image/svg+xml selling price < cost price selling price > cost price Banana Brown coconut Brinjal Green chillies Onion Potato Tomato Bengal gram Moong Tur Urad Paddy Groundnuts Soyabean Red chillies Turmeric 0 20 40 60 80 100 % of farmers Fruits Vegetables Pulses Cereals Oilseeds Spices

Farmer’s share

The average share of farmers in retail prices is lower in the case of perishables like potato and onion and higher in the case of non-perishables like oilseeds and spices.

image/svg+xml Farmer’s share in retail price (%) 25 35 45 55 65 75 Red chillies Groundnuts Potato Rice Tur Onion & green chillies

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Printable version | Aug 8, 2020 8:13:11 PM |

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