Agriculture commodity prices have seen a strong run and there are various reasons for that which include international prices have been rising, excess monsoons have led to some damage to crops, and festival demand is yet another thing.
Siraj Hussain, FMR Agri Secy said, “I really cannot understand the reason behind such large spike in prices. I must also say that the government’s estimates of production are at variance with this price rise so it feels that the trade estimates of pulses and oilseeds etc. are largely different from what the government estimates. One reason could be losses in some states due to excess rains etc. but I do not think that fully explains.”
“One reason could be resurgence in demand for food items after the restoration of the economic activity. So it seems that people are getting back their income and therefore they are buying more. But this is only conjecture if I may say so,” he said.
Are the farmers actually getting higher prices? Hussain added, “For several cereals the farmers get a much higher share of the retail price paid by the consumers. In case of wheat and rice for example the farmers would get about 90 percent or more, in case of vegetables and other fresh items he gets about 30-40 percent. If the prices continue to stay high then I do think that farmers will also be able to realise a better price when they bring their produce for sale in mandi.”
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