Herald View: Why our grocery bill is breaking our budget
‘Operation Greens’ fails to stabilise TOP (tomatoes—onions—potatoes) prices
For the past several weeks, we have been regaled by media reports of hijacked tomato trucks, a vegetable vendor booked by police for hiring bouncers to safeguard stocks from ‘violent’ customers, a smartphone dealer offering tomatoes free with every purchase and McDonald’s dishing up tomato-free burgers citing ‘quality issues’.
The price of tomatoes has crossed Rs 270 a kilogram in some cities, from a relatively modest Rs 30 a kg barely a month ago. The price monitoring division of the department of consumer affairs conceded that the highest retail price towards the end of June was Rs 127 a kg, and Agmarknet noted a 1314.9 per cent increase in wholesale prices in Delhi over a month.
Now, the memes are red and squishy. Pranksters are adding tomatoes to trousseaus. Social media posts ‘celebrate’ that petrol and diesel are, for once, cheaper than salad. The Telangana police are in pursuit of drive-in robbers who made away with tomatoes while vendors slept. Apparently, this sudden growth spurt in tomato prices is ‘normal’ per many wise heads. Indeed, agricultural experts agree that 70 per cent of the annual tomato harvest is usually gathered between December and June, with a shoulder into the secondary season of July–November. As supply dwindles at end of June, prices increase and rationalise once the second crop comes on the market. And yes, the monsoons add supply-chain bottlenecks, causing temporary artificial shortages.
We haven’t seen quite these prices before, though, have we? One reason being cited is the untimely rains that destroyed crops in the southern states this year. And then the current monsoon mayhem messing with current schedules and future expectations. But few farmers are reaping a windfall from this late price surge; most tomato growers remain losers, having had to sell their produce for Rs 3–10 a kilogram in January–February. Even in June, farmers in Andhra Pradesh dumped their tomatoes in the street rather than accept Re 1 a kilogram from private traders. With the rising cost of farm inputs, energy, transportation and wages, farmers rue that the cost of growing vegetables keeps increasing, with no mechanism for price stability to ensure they recover the costs. Who’s making money then? The middleman.
Unlike onions, eaten by both the economically distressed and the affluent, and the longer-lived potato—the other two staple vegetables in Indian kitchens—tomatoes are ‘fancier’, delicate ‘perishables’, and certainly the diet of a more affluent table, excusing further price manipulation. The grocery bill inflation earlier driven by sugar and cereals is now increasingly influenced by fresh produce. After all, we have a surplus of cereals, they store well, and as people’s income grows, they tend to diversify into fruits and vegetables to eat ‘better’. Yet, though India is among the highest ‘TOP vegetable’ producers in the world, it seems unable to regulate domestic prices or exports. Whenever supply of onions to Bangladesh or tomatoes to Pakistan is impacted by political tension or transport bottlenecks, the glut in the domestic market drives prices down—so farmers dump, storage suffers. The government, the Reserve Bank of India (RBI), the agriculture experts are all well aware of the levers. The RBI posted the results of a sponsored study this month, describing price volatility of TOP vegetables. No action ensues, however.
In 2018, the Union government had announced ‘Operations Greens’, basis the recommendation of a committee headed by Ashok Dalwai. It was to focus on price stabilisation and development of value chains. NAFED was designated as the nodal agency to manage excess supply, directing it to regions in deficit. The government was to subsidise 50 per cent of the transportation and storage costs. The scheme’s functioning has been erratic, at best. The Dalwai committee too, however, described tomatoes as a ‘sensitive product’ and suggested produce be delivered directly from farm to consumer. But the logistics never emerged. Nor is any administrative body providing weather warnings. Following the government’s failure to force through its controversial farm laws, it appears we must give up on agricultural reforms entirely.
Meanwhile, cash-rich corporates and e-commerce giants take advantage of regulatory failures. While consumers pay and farmers pray, the big corporations are happy to play the market.