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The drop in prices has led to a decline in the earnings of the farmers for the major crops, thereby inducing the rural economy to bear the stress.

As per the report published by Elara Securities, the income of rural farmers in India has been severely affected during the CY25 Kharif season due to a significant drop in the prices of food crops.

The drop in prices has led to a decline in the earnings of the farmers for the major crops, thereby inducing the rural economy to bear the stress.

The Kharif season, which is primarily harvested in October and November, turned out to be difficult for farmers this year.

As reported, they were unable to sell their produce at better prices and the prices at the mandi (market) were well below the Minimum Support Price (MSP) for most crops. The weak price realisation has been a direct factor in the decline of farming incomes.

Weather damage and delayed harvesting worsen situation

There were a number of reasons for this situation to arise. In some regions, the monsoon rains were excessive and that led to the destruction of the crops.

Further, the delayed harvesting resulted in a situation where a large volume of produce came to the mandis at the same time. This led to an oversupply and a further reduction in prices. Also, the quality of the harvested crops was below standard and there was very little government intervention to support the prices, which made the situation worse for the farmers.

The report mentioned that during the Kharif season of CY25, farmers struggled a lot because the prices of nearly all the crops dropped significantly below the MSP.

Policy decisions add pressure on crop prices

Price weakening was also attributed to government actions. The government permitted the tax-free entry of significant crops like cotton, tur, and urad, as reported by ANI.

Furthermore, the basic customs duty on edible oils such as crude palm oil, soy oil, and sunflower oil was reduced from 20 per cent to 10 per cent.

Maize and soy bean got cheaper because of the speculation regarding imports coming from the US as part of a potential India-US trade deal. This led to further decline in market trust and subsequently to farmers’ income.

Key crops trade sharply below MSP

The report, which included data from mandi prices, pointed out that at the end of November 2025 black gram prices were 19 per cent below MSP, cotton prices fell by 8 per cent, soybeans lost 18 per cent and maize prices were 27 per cent below MSP.

The prices of maize, soyabean, black gram, and bajra in FY26 were at only 73 per cent, 82 per cent, 81 per cent, and 87 per cent of MSP, respectively. Cotton prices were at 92 per cent of MSP while those of paddy were around 96 per cent.

Wheat prices, which had been significantly above MSP in the previous years, eased to about 105 per cent of MSP in FY26.

Elara Securities warned that the yielding and pricing trends negatively impacted the rural incomes from cultivation. A continuing reduction in farm incomes could be a factor that will negatively affect rural consumption and demand in the coming months.

Source : zeebiz