India’s Farmers Will Continue to Face Price Crash Nightmares Until Export Markets Are Created

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The Indian farmer today faces a peculiar challenge. 

If his crop is bad, due to any natural calamity or spurious seed or pesticide, there may be a rise in prices. Since this results in food inflation and attracts the attention of the media, the government comes in with a heavy hand in the form of action under Essential Commodities Act. This then depresses the prices and the farmer bears the brunt. This was the case of onion in November and December 2019.

If nature is benevolent and the crop is good, production may turn out to be more than what domestic demand requires. In this case also, the farmer suffers because prices crash and  sometimes the farmer cannot recover even his cost of cultivation. An example is the case of onion in Kharif 2017 when the prices in Madhya Pradesh crashed to Rs 200 per quintal.

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