farm challenge for 22 October 2025

Farm Challenge Latest News

• Retail food inflation has stayed negative for four consecutive months till September 2025, a sharp reversal from the 8.5% annual rise seen between July 2023 and December 2024.
• The decline stems from improved supplies following two consecutive good monsoons that offset the El Niño-driven drought of 2023–24, along with weak price sentiment in agricultural markets that has kept food prices subdued.
• This article highlights India’s emerging post-Diwali farm challenge, where a sharp turnaround from high food inflation to falling crop prices has shifted the stress from consumers to farmers.

India Faces a Cereal Glut as Wheat and Rice Stocks Surge

• India is witnessing a major supply glut in cereals, particularly wheat and rice, driven by record production and strong procurement.
• As of October 1, wheat stocks in government godowns stood at 320.3 lakh tonnes, the highest in four years and 1.5 times the required buffer. 
• The rice situation is even more extreme, with stocks 4.4 times higher than needed for public distribution and emergency reserves.
• The oversupply is expected to intensify post-Diwali as the new kharif crop enters the market. 
• Farmers have sown a record 44.2 million hectares under rice, up from 43.6 million hectares last year, while maize acreage has jumped from 8.4 to 9.5 million hectares.
• Consequently, maize prices have dipped to Rs 2,000–2,100 per quintal in states like Karnataka and Haryana, below both last year’s prices and the MSP of Rs 2,400, signalling a supply-driven price slump in the cereal market.

Why Soyabean Prices Are Falling Despite Lower Production

• India’s soyabean production in 2025 has fallen to a five-year low of 105.4 lakh tonnes (lt), down 16.3% from 125.8 lt in 2024, according to the Soybean Processors Association of India (SOPA).
• The drop is due to reduced acreage (12 million hectares vs 13 mh last year) and lower yields — from 1,063 kg to 920 kg per hectare. 
• Excess rainfall, waterlogging, and diseases like yellow mosaic virus and aerial blight have damaged crops, producing smaller grains and yield losses.

Global Factors Driving Weak Sentiment

• Major producers — Brazil, the U.S., and Argentina — have reported bumper harvests, flooding global markets.
• As a result, soyabean meal export prices at Indian ports dropped from $490 per tonne (Sept 2024) to $398 (Sept 2025), while export volumes fell from 9.1 lt to 8.4 lt year-on-year.

Competition from DDGS in Livestock Feed

• Demand for soyabean meal is also being squeezed by cheaper substitutes like DDGS (Distiller’s Dried Grains with Solubles) — a byproduct of ethanol production from maize and rice.
• Sold at Rs 15–17/kg, DDGS competes directly with soyabean meal (Rs 31.5/kg) in the poultry and cattle feed market.
• Consequently, domestic soyabean meal consumption for feed has fallen from 67 lt in 2022–23 and 66 lt in 2023–24 to 62 lt in 2024–25.
• In essence, despite low output and stocks, soyabean prices remain depressed due to global oversupply, weak export demand, and domestic competition from cheaper feed substitutes

The Post-Diwali Challenge: From Food Inflation to Farmer Distress

• After battling high food inflation through 2023 and 2024, which eroded household purchasing power, the government has now successfully stabilised prices. 
• However, this has led to an unexpected reversal — the pressure has shifted from consumers to farmers.

Farmers Hit by Falling Prices

• Currently, prices of most kharif crops — including maize, soyabean, cotton, bajra (pearl millet), arhar (pigeon pea), and moong (green gram) — are trading below their Minimum Support Prices (MSPs).
• Market sentiment remains bearish, despite strong production supported by ample monsoon rains, recharged aquifers, and well-filled reservoirs, which also bode well for the upcoming rabi (winter-spring) season.

A Likely Policy Shift: From Consumer to Farmer Focus

• With farmers now bearing the brunt of low prices, the government may be forced to recalibrate its policy stance.
• Likely steps include:
  • Restoring import duties on cotton and yellow/white peas to protect domestic producers.
  • Increasing MSP procurement of pulses and oilseeds under the price support scheme to stabilise farmer incomes.

Conclusion

• Having tamed food inflation, the government now faces a post-Diwali farm crisis marked by oversupply and price crashes. 
• The focus may shift toward supporting farmers to prevent prolonged rural distress and maintain agricultural stability in the months ahead.

Source: IE