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