Veggie prices cheer buyers, not farmers
2 min read . Updated: 10 May 2023, 12:37 AM IST
PremiumWholesale inflation in food articles in March still rose 5.48%, compared with a rise of 3.81% in February, which means that the dip in prices was driven entirely by vegetables. Horticulture
New Delhi: India’s food inflation in recent months has been cooled by a sharp fall in vegetable prices, driven by a paradox: better access to technology and improved seeds have led to production gluts, but that is hurting horticulture farmers’ incomes.
Trends in farm output show India’s horticulture output has been surpassing that of cereals, which are backed by federally fixed floor prices, due to high-yielding planting material and productivity-boosting practices.
Deflation in vegetables pushed wholesale inflation in March to a 29-month low at 1.43%.
Within the wholesale price index food basket, vegetables inflation fell 2.22%, compared with a far steeper fall of 21.53% in the previous month.
Wholesale inflation in food articles in March still rose 5.48%, compared with a rise of 3.81% in February, which means that the dip in prices was driven entirely by vegetables. Horticulture growers have been struggling with prices over the last two quarters of the current financial year.
“I have thrown away most of my capsicum produce on the road near the wholesale market. Forget any profit, the selling cost is 30% lower than cultivation costs," said Jagpal Rana, a grower from Haryana’s Kurukshetra.
Consumer prices of even onions and potato, which are volatile items, fell 20% and 30% in March. In the consumer inflation basket, prices of milk, milk products and cereals rose 15.3%, 9.3% and 18.2%, accounting for most of the inflation. Retail inflation in vegetable was negative at -8.5%. Even mustard prices are below federally fixed minimum support prices, which are set at 1.5 times the cost of cultivation.
“High-yielding hybrids and mechanization are the key reason for an increase in productivity of horticulture crops. We have registered an increase of 2.3% in productivity of onions and potato between 2015 and 2020," said Ajit Khurana of the Agriculture Technology Innovation Centre, Hyderabad.
A crash in onion prices has left farmers in states such as Maharashtra and Karnataka reeling under losses. While onion prices remained muted due to a glut for much of 2022, winter-sown onion suffered damage due to rain and hailstorm in April in Maharashtra, the largest grower, leading to a fall in quality.
“Along with this, large arrivals in Nashik because of uncertainty over quality have caused onion prices to plunge again," said Prakash Kumawat, an official of Lasalgaon, Asia’s largest onion trading hub.
According to the agriculture ministry’s third advance estimates of area and production of horticultural crops for 2021-22, output has been estimated at a record 342.33 million tonnes in 28.08 million hectares, pointing to higher productivity.
A new report by the ministry of statistics and programme implementation this month showed that the gross value of output in cereals stood at ₹ 3.36 trillion in 2011-12, the highest among all crops. However, in 200-21, the gross value of output was highest in fruits and vegetable at ₹3.95 crore.