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Yearly Average Index Number of Prices Received and Price Paid by Farmers (2009-23)


Observations

1.            General Trends in Indices:

o             Index of Prices Received by Farmers:

             This index increased steadily over the years, from 3083 (2009) to 9738.83 (2022), indicating that the prices farmers received for their produce have improved significantly.

o             Index of Farm Cultivation Costs:

             Farm cultivation costs have risen consistently, from 11468 (2009) to 34896.92 (2022), showing a sharp rise in farming expenses over time.

o             Index of Domestic Expenditure:

             Domestic expenditure also shows a consistent upward trend, increasing from 3640 (2009) to 8746.08 (2022).

o             Index of Prices Paid by Farmers:

             This index reflects the overall costs (both farm and non-farm expenses) borne by farmers, increasing from 6460 (2009) to 17469.42 (2022).

2.            Disparity Between Indices:

o             The Index of Farm Cultivation Costs and Index of Prices Paid by Farmers have grown at a significantly higher rate compared to the Index of Prices Received by Farmers.

o             For example, between 2009 and 2022, the prices received by farmers increased approximately 3.16 times, whereas the farm cultivation costs increased about 3.04 times, and the prices paid by farmers grew by 2.7 times.

3.            Sharp Increases in the Latter Years:

o             From 2015 onwards, the growth rates of all indices accelerated, especially the Index of Farm Cultivation Costs, which crossed 30,000 by 2019 and reached nearly 35,000 in 2022.

o             Similarly, the Index of Prices Paid by Farmers crossed 15,000 in 2019 and reached 17,469.42 by 2022.

4.            Domestic Expenditure Growth:

o             The Index of Domestic Expenditure shows consistent growth, doubling from 3640 (2009) to 8746.08 (2022), reflecting increased living costs for farmers.

 

Conclusions

 

1.            Rising Costs for Farmers:

o             Both farm cultivation costs and the overall prices paid by farmers have grown steadily over the years, putting pressure on farmers’ incomes despite the increase in prices received for their produce.

2.            Relatively Slower Growth in Prices Received:

o             While the prices received by farmers have increased over time, the rate of increase lags behind the rise in farm cultivation costs, which could negatively impact net farm profitability.

3.            Impact of Domestic Expenditure:

o             Alongside rising farm-related costs, the steady growth in domestic expenditure adds to the financial burden on farmers, further challenging their economic stability.

4.            Financial Pressure Over Time:

o             The disparity between the rising costs (farm and non-farm) and the prices received highlights a growing financial burden on farmers over the period analyzed, emphasizing the need for effective support systems or price stabilization mechanisms.