Agriculture output touches new high, yet farmers' income stagnant

INDIA'S FOODGRAIN AND horticultural output continued to rise at a satisfactory pace in 2025 on account of surplus monsoon, adequate supply of highly subsidised fertilisers.

- SANDIP DAS

Several measures including direct cash transfer, crop insurance and assured purchase at remunerative prices from farmers also helped.However, because of liberalised imports of edible oils and pulses and their higher output, farmers' price realisation remains under stress. Mandi prices of many agricultural commodities continue to rule below the minimum support price (MSP). During most part of 2025, the prices of staple vegetables - tomato, onion and potato - ruled way below the 2024 level because of a sharp rise in production induced by higher price realisation in 2024.

Pushan Sharma, director, Crisil Intelligence, said that in the current rabi season, the prices of onion, potato and tomato declined by 38%, 34% and 24% on-year, respectively. Despite the government's intervention through assured purchase from farmers at MSP, mandi prices of several pulses and oilseeds like soyabean stayed below the benchmark.

"Sole focus on production leads to glut. Lower farmgate prices and stagnating incomes are the most frustrating part. Shortsighted agricultural policy and declining allocations in real terms for agri research and development are not the right strategy for Viksat Bharat," Ajay Vir Jakhar, chairman, Bharat Krishak Samaj, told FE.

While persistently low food inflation has come in handy for the macroeconomic managers and monetary authorities, the terms of trade being tilted against farmers is causing rural income revival insufficient and nondurable. Production of foodgrains - rice, wheat, pulses and coarse cereals - rose 7.7% to a record 357.73 million tonne (MT) in the 2024-25 crop year (July-June), up from 332.30 million tonne in 2023-24. Correspondingly, in 2024-25, the horticulture production, which includes fruits and vegetables, increased by 4% to 369.05 MT, up from 354.74 MTin 2023-24.