The causes of tomato price inflation and its management have been a subject of debate. The Centre’s timely intervention of directing the National Agricultural Cooperative Marketing Federation (Nafed) and the National Cooperative Consumers Federation (NCCF) to purchase tomatoes from Andhra Pradesh, Karnataka, and Maharashtra and distribute them in areas that have recorded the biggest jump in tomato prices is expected to provide relief to consumers.

However, why didn’t we see any such intervention when a few months ago, due to fall in prices, farmers across the country reportedly dumped their bumper vegetables on the roads and fields? Besides, did anyone bother to know whether farmers benefited from such a price rise?

The National Commission on Agriculture (1976) as well as the National Commission on Farmers (2006) had emphasised the role of marketing in providing higher income to farmers.

The poor state of agricultural marketing in India has been reported by a number of committees, including the Royal Commission of Agriculture way back in 1928, the National Commission on Agriculture (1976) and the National Commission on Farmers (2006).

The Dalwai Committee on Doubling Farmers’ Income (2017) has observed that in case of fruits and vegetables, the share of consumer rupee that reaches the farmers is as low as 20 per cent.

Farmers suffer most during a bumper harvest, when they either dispose the stocks at throwaway price to middlemen or dump them on the roads, given the government agencies’ constraints of limited buying capacity.

Lack of logistics connectivity to ensure that the harvest reaches markets in time also results in lowering of the farmers’ ability to monetise their produce. This becomes even more critical in the case of the perishable produce. The country incurs post-harvest fruits and vegetable losses of about 16 per cent owing to the absence of modern cold storage facilities and lack of proper food processing units. Though the country has created 162 million tonnes of warehousing, cold storage and reefer van facilities, a majority of which are available for foodgrains alone; very limited capacity is available for fruits and vegetables.

Corrective Measures

In the absence of proper storage facilities, farmers cultivating fruits and vegetables face a livelihood crisis.

What is required are decentralised cold storages in or around villages that would help farmers store their horticulture commodities during the time of surplus, thereby obviating distress sale or during such times when the produce cannot be taken to the demand centres. Focussing on processing of tomatoes, onions and potatoes (TOP) crops not only increases their shelf life, such value additions help farmers earn much more. But to insulate it from disruption of supply chains, smaller and decentralised rural food processing units near the main production areas/blocks is the way forward. This is an opportune time to think of green decentralised food processing units where all the energy requirements, heat as well as electricity are met by locally available renewable energy sources and crop residues.

Better road connectivity and markets closer to villages also need to be established. Intermediary culture needs to be abolished. Given that the TOP vegetables are staples in Indian households and less elastic in demand, the government should consider establishing a special minimum support price (MSP) for TOP crops, supported by government-led procurement.

The writer is Assistant Professor Senior in Economics, Vellore Institute of Technology. The views are personal.

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