Key Insights from RBI Working Papers on Farmer’s earning

Source: The post on Key Insights from RBI Working Papers on Farmer’s earning is based on the article “Farmers earn less than 40% in case of fruits, vegetables”  published in “The Hindu” on 4th October 2024.

Why in the News?

Recently, RBI released a working paper titled “Price Dynamics and Value Chain of Fruits in India”. The insight of this paper underscores the disparity in the share of the consumer rupee farmers receive, with significantly higher returns in dairy, poultry, and pulses compared to fruits and vegetables.

Key insights

1. Middlemen and Retailers Profiteering in Fruits and Vegetables: During periods of high inflation, middlemen and retailers have captured a significant portion of the price paid by consumers for fruits and vegetables.

This results in lower earnings for farmers, who earn less than 40% of the consumer rupee in these cases.

2. Farmers’ Share in Dairy and Poultry: In contrast, dairy and poultry farmers receive a much higher share of the consumer rupee.

i) Milk: Farmers earn 70% of the consumer rupee.

ii) Eggs: Farmers earn 75% of the consumer rupee.

iii) Poultry Meat: Farmers and aggregators together receive 56% of the consumer rupee.

3. Farmers’ Earnings from Fruits: The working paper reveals that farmers receive a relatively low share of the consumer rupee for key fruits: Bananas: 31%, Grapes: 35% and Mangoes: 43%

4. Pulses: Higher Farmer Share In the case of pulses, farmers enjoy a larger portion of the consumer rupee: Chana (Gram): 75%, Moong: 70% and Tur (Arhar): 65%

5. Farmers’ Share in Vegetables: The working paper outlines the following modest earnings for farmers in essential vegetables: Tomatoes: 33%, Onions: 36% and Potatoes: 37%

UPSC Syllabus: Indian Economy