India’s Summer Harvest Feeds Freight Boom, but Farmers Pay the Price

- R. Suryamurthy

A sharp 4% to 6% increase in truck rentals across major Indian trunk routes in April has emerged as a double-edged sword—signaling robust economic activity but tightening the noose on farmers, particularly smallholders, by pushing up the cost of transporting bumper fruit and vegetable crops to market.

According to the Indian Foundation of Transport Research and Training (IFTRT), the surge in freight rates has been driven by a spike in cargo volumes from the summer harvest, brisk movement of manufactured goods, steady consumer demand, and stable operational expenses for truckers. While this rental upswing reflects a healthy transport sector, it has direct implications for India’s agricultural economy—where margins are often razor-thin.

The timing of this rental hike is especially critical. April and May are peak months for harvesting and dispatching perishable produce such as mangoes, watermelons, muskmelons, and vegetables like okra and cucumbers. For millions of Indian farmers, especially those cultivating perishable crops, the rise in logistics costs can erode already modest profits.

“Truck rentals going up just when farmers are moving their summer produce to markets means they take home less,” said a senior agricultural economist based in Delhi. “In some regions, the hike in transport cost alone can shave off 5–10% of a farmer’s returns.”

This impact is felt disproportionately by small and marginal farmers—who constitute over 85% of India’s farming population—because they often depend on third-party transporters and have less leverage to negotiate freight or delay sales until prices improve.

Truck rentals rose by 5.5% to 6% on key routes connecting industrial and agricultural hubs such as Delhi-NCR, Mumbai, Bangalore, Chennai, Hyderabad, Nagpur, and Vijayawada. Eastern and Northeastern regions saw slightly lower increases of 4% to 4.5%. This is the most buoyant rental performance since the post-COVID recovery period, IFTRT said in its April bulletin.

The rise has been fueled by an 8–10% increase in cargo availability—from summer fruits and vegetables to rising dispatches of consumer goods, cement, two-wheelers, and FMCG products. Spending from rural India has also picked up following healthy wheat and chana (gram) harvests, IFTRT noted.

Retail and part-load freight operators have taken advantage of the demand surge by hiking per-kilogram freight rates and passing on 5% GST levies to customers. Yet, the sector remains marred by tax evasion, with some transporters and traders colluding to bypass GST—hurting both public revenue and the competitiveness of law-abiding firms.

While freight charges for high-value cargo are partly cushioned by improved vehicle quality—nearly 50% of new trucks sold are now rigid closed-body carriers ensuring cargo safety—this benefit is rarely extended to small farmers moving perishable goods in bulk.

The rental hikes expose systemic gaps in rural logistics and infrastructure. “Without adequate cold storage, farm gate procurement, or rural aggregation centres, farmers are forced to rely on market-bound trucks, whose prices fluctuate with demand,” said an analyst tracking rural supply chains.

The IFTRT called on state governments to offer support infrastructure—such as rural parking, loading bays, and small truck facilities—to help keep transport affordable for local routes. It also cautioned against falling prey to vehicle manufacturers lobbying for large-scale scrapping of older, roadworthy trucks used in rural haulage, saying such moves hurt small fleet owners and raise logistics costs.

While IFTRT expects rental rates to remain firm until the monsoon’s onset in July, the think tank flagged a significant geopolitical risk: any escalation following the Pahalgam massacre or full-fledged conflict with Pakistan could derail economic stability, hitting trucking and agricultural trade alike.

In contrast to the volatility, some silver linings remain. International crude prices are low—hovering around USD 64.60 per barrel—and the rupee is relatively strong at ₹84.60 per dollar. IFTRT has urged policymakers to pass on the benefit by slashing diesel and tyre prices by 10–15% to reduce transport costs across the board.

For now, farmers navigating this peak dispatch window are caught in the crossfire of strong economic momentum and rising operational pressures. Without targeted interventions, the burden of higher freight could eat into the gains of a good harvest—threatening rural incomes and food supply chain resilience.