Rise in inflation has raised the prices of agricultural commodities in Gujarat. However this has also contributed to an increase in farmers’ income. This year Gujarat’s farmers are earning about 25% more than last year, on crops such as rice, cotton, groundnut, cumin and mustard. Rice has been the highest earner with price touching Rs.410 per quintal(20 Kg)-an increase of 107% in fiscal 2008.

However it must be noted that though farmers obtain high prices than the last few years, production costs, including that of fertilizer, pesticides, seeds, electricity and diesel, have also increased. This has put a dent in farmer’s profit margins.

Other important thing is that stockists earn more margins than normal farmers. So, farmers who want to earn more need to create stock capacity so that, they can demand higher costs from traders in the off season.

Farmers could profit even further if middle agents, who get higher returns than the farmers are removed from the commodity market.