Farmers' Earning in Agri Produce: RBI | 01 Mar 2025

Source: IE 

Why in News?

The Reserve Bank of India (RBI) conducted a pan-India survey on farmers’s share in consumer prices in rabi crops. 

• It covered mandis and villages across 18 states analysing 12 rabi crops and including inputs from farmers, traders and retailers. 

What are the Key Findings of the Survey on Farmers' Earning in Agri Produce? 

• Farmers’ Share in Consumer Prices: Farmers received 40-67% of the final consumer price for major rabi crops surveyed.  
  • Wheat Farmers: Wheat farmers received 67% of the consumer price, the highest among surveyed crops, with 25% selling at MSP for an assured market. 
  • Rice and Other Cereals: Rice farmers’ share in retail prices was 52% in 2024 that remained stable over the years i.e., 45% in 2022, and 49% in 2018. 
  • Pulses and Oilseeds: Lentil (Masoor) farmers received around 66%, while Gram (Chana) farmers received 60% of the consumer price. 
    • Mustard farmers received 52%, slightly lower than the 55% recorded in a 2021 study. 
  • Perishable Crops: Farmers’ share in fruits and vegetables ranged from 40-63%, significantly lower than for cereals and pulses. 
    • The combined share of traders and retailers in consumer prices was more than 50% for most perishable crops (except tomatoes). 
    • Perishable crops (fruits and vegetables) had a lower farmers’ share compared to Non-perishable crops (such as wheat and pulses). 
      • Perishable products have short shelf life, seasonal production, varied quality, special logistics, strict standards, demand fluctuations, climate dependency, and supply chain uncertainties. 
• Digital Transactions: Cash transactions still dominate agriculture, but electronic payments have risen significantly in the 2024 survey compared to 2018 and 2022. 
• Supply Chain Challenges: 
  • An unorganized supply chain with multiple intermediaries limits transparency in product movement, finances, and pricing, reducing farmers’ share of consumer prices. 
  • A lower farmers’ share discourages crop diversification away from cereals.