Post-Diwali Farm Challenge: From Consumer to Producer Focus
Retail food inflation in India has turned negative for four consecutive months, ending September 2025, thanks to strong monsoons and improving supply conditions. Yet, this apparent victory for consumers masks a deepening crisis for farmers: many crops — such as maize, soyabean, cotton, millets and pulses — are trading well below their Minimum Support Prices (MSPs). For example, maize in states like Karnataka and Haryana is reported at ~₹2,000–2,100 per quintal, vs MSP of ₹2,400. The article argues that after years of prioritising consumer inflation, the policy focus may pivot to producer incomes and farm sector distress.
Key Points
- Good back-to-back monsoons have eased supply pressures, causing cereal and other crop prices to soften.
- Government stockpiles are unusually high: e.g., wheat stock on October 1 stood at 320.3 lakh tonnes — the highest in four years and roughly 1.5× the minimum buffer.
- Rice stocks held by government agencies are about 4.4× the required level for the public-distribution system + strategic reserve.
- The upcoming crop marketing season post-Diwali is expected to add further supply pressure, especially in maize (acreage jumped from 8.4 to 9.5 million ha) and rice (44.2 million ha this kharif vs 43.6 million ha last year).
- With the producer side stressed, policy action may shift: this could include bigger MSP procurement, restoration of import duties (for certain crops), and greater focus on farmer incomes rather than consumer food price inflation alone.
Industry Insight
For the dairy and allied agribusiness sectors, this change in orientation generates two major implications:- Cost-pressure squeeze for feed crops & forage: When primary crops such as maize, soyabean (key for animal feed) trade below MSPs, feed-input costs might remain under pressure, but farmer distress could limit availability or raise risk of disruption. Dairy processors relying on domestic feed/forage supply chains should prepare for supply reliability risks or input volatility.
- Policy tailwinds for value-added / diversification streams: As the government shifts its focus to boosting farmer income, there could be increased incentives for value-added agricultural processing (e.g., milk/forage value chains), contract farming, and integration of smallholders. For dairy businesses, this may open up opportunities: stronger farm-gate linkages, more public-private collaboration, and potential feed-oriented subsidies.
Source : Dairynews7x7 Oct 22nd 2025 based on article by Harish Damodaran