Floods, low crop prices leave Indian farmers under stress

Market prices of key crops fell below MSP, squeezing farmer incomes severely across regions

- Vijay C Roy

Agriculture supports 42% of India's population and contributes 18% to gross domestic product, amplifying the impact of weak farm incomes.

India struggled to protect farmers as the country’s agrarian distress worsened in 2025. Severe monsoon rains caused devastating floods in Punjab, inundating 200,000 hectares of farmland, besides damaging crops in Haryana and Maharashtra, notably the Marathwada region. As a result, farmers faced a loss of income and soil damage and sought better compensation and long-term support.

If that was not enough, lower market prices for their produce further eroded their income. Prices for several key commodities slipped below the minimum support price (MSP), at which the government procures produce from farmers. While the broader macroeconomic environment benefited from low food inflation, the decline in farm-gate prices raised serious concerns about rural incomes and the overall stability of the agricultural economy.

Low inflation can adversely affect rural incomes if farmers are forced to sell below the benchmark procurement price. The prices of grains, most pulses and oil seeds such as soybean, groundnut and sunflower are currently below their MSP.