Consumers, farmers both to profit: Here’s how farmers will earn more despite softening of crop prices

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August 24, 2020 4:45 PM

Farmers this year may be in for better realization for their products with kharif season 2020 turning out to be a promising one.

Horticulture farmers are expected to earn more for their farm produce this year due to top three reasons.

Farmers this year may be in for better realization for their products with kharif season 2020 turning out to be a promising one. Horticulture farmers are expected to earn more for their farm produce this year due to top three reasons, a report said on Monday. “Farm profit per hectare for field and horticulture crops is expected to increase 3-5% in kharif season 2020, supported by higher crop acreage, expected improvement in productivity, and government support to procurement at minimum support price (MSP),” a report by CRISIL Research said. Robust monsoon rainfalls have also aided agricultural growth this year. 

However, the bumper kharif crop may also result in softening of prices of some commodities. While surplus crops are likely to push prices downwards, farmers are still likely to earn more due to government support to paddy procurement. Paddy crop is the most critical crop in terms of farm income, given it accounts for nearly 30% of foodgrains production. Moreover, incremental sowing of more remunerative crops and improved productivity on-year will boost profitability at an aggregate level. 

Further assisting productivity of kharif crops is adequate water availability in reservoirs as water availability is critical for supporting growth stages of crops. Last year, delayed onset of monsoon in June followed by excess rains and flood-like situation in August-September had a detrimental effect on crops in most western and southern states. Due to low base last year, kharif output could rise 5-6% to a record.

Meanwhile, thanks to good spatial distribution of rains, a 2-3% rise in sown area on-year at  nearly 109 million hectares for this kharif season is likely. “The area under paddy cultivation is also set to increase because of both rains and reverse migration of labour to the eastern and southern states,” the report said. However, area sown under vegetables, cotton and maize would be lower this season as have been discouraged from sowing them due to lower MSP.

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