A farmer inspecting wheat crops that were flattened after heavy rains, on the outskirts of Amritsar, Punjab, India, on Wednesday, April 7, 2021. (Photo by Sameer Sehgal /Hindustan Times)
A farmer inspecting wheat crops that were flattened after heavy rains, on the outskirts of Amritsar, Punjab, India, on Wednesday, April 7, 2021. (Photo by Sameer Sehgal /Hindustan Times)

Amid pandemic, better prices for key winter crops bring relief

Cultivators are receiving nearly federally fixed floor prices for wheat at private markets since winter harvests began on April 1.
By Zia Haq, New Delhi
PUBLISHED ON APR 29, 2021 02:01 AM IST

As an unstoppable pandemic begins weighing on the economy, agricultural mandis or wholesale farm-produce markets are witnessing a fortuitous rebound, offering higher-than-benchmark minimum support prices (MSP) to farmers for key winter staples, cushioning farm incomes.

Cultivators are receiving nearly federally fixed floor prices for wheat at private markets since winter harvests began on April 1. Farmers have also got up to 10% higher rates than MSP for mustard, gram, lentils, barley and rapeseed, wholesale price data from Agmarknet, an official platform, shows.

Better farm-gate prices come as good news as India battling a paralysing second wave of Covid-19 infections which have squeezed incomes. Nearly half of all Indians depend on a farm-based livelihood. Unprofitable prices have been the bane of farming for long. Prices of primary articles not supported by government procurement have been up to 40% lower than floor prices for winter crops in recent years. An MSP is the federally determined price that promises minimum 50% profit over cost of cultivation. A law guaranteeing MSP has been a key demand of farm groups protesting the three central laws passed last year with the aim to liberalise the farm economy.

According to Agmarknet data, between April 1 and 18, mustard prices nationally were 22% higher than MSP. Wheat was trading at near-MSP levels.

In Madhya Pradesh and Punjab, the two biggest producers, wheat was selling at a rate equal to MSP in private markets.

The Centre has set a target of procuring 43 million tonne of wheat, which is 40% of the total output. Prices are likely to firm up as procurement levels go up. Till April 27, the Centre had procured 23.2 million tonne of wheat from 2.22 million farmers at an MSP value of 43,916 crore, according to farm ministry data.

Analysts say the current upswing is partly the result of higher global commodity prices and import duties on items such as edible oils. The global FAO Food Price Index released on April 8 averaged 118.5 points in March 2021, 2.1% higher than in February. The increase was led by strong gains in vegetable oils, meat and dairy subindices, while those of cereals and sugar subsided. “These factors have helped firm up prices this season. Global prices are always a big cue for domestic prices,” said Abhishek Agrawal of Comtrade, a commodities trading firm.

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