Are high vegetable prices here to stay? - NO

A few months back, I was in a village called Kheri Man Singh in Haryana’s Karnal district.

Farmers there told me how they sold tomatoes at Rs 20 per crate (of 25 kg each) this January and how by February-end, when their crop was already marketed, prices had crossed Rs 300.

“Today, using latest pesticides, I can control

keeda (insect) and get yields of 850-900 crates per acre. But prices I cannot control. Growing tomato is like satta (gambling); there are times when even I have sold for Rs 200-300 and made money”, explained one farmer.

Satta is understandable in tomatoes, where, without cold storage, supplies to the market cannot be regulated. It makes prices volatile in the natural course and, hence, more amenable for people to wager their money on — which ordinary farmers and consumers cannot. But this does not hold for onions, where all you need is a dry, heat-protected and well-ventilated environment to ensure not sprouting or rotting. The storage structure should essentially be constructed on a raised platform to prevent moisture or direct contact of the bulbs with the soil. No great technology or need for a Walmart there.

In onion, the main crop from Maharashtra arrives from mid-January till about mid-May, while harvesting in Madhya Pradesh happens from mid-April to mid-July.

The major crop after this, mainly of Andhra Pradesh and Karnataka, comes only from mid-September. Thus, the period from mid-July to mid-September is when there aren’t any crop arrivals and the supplies mainly comprise the stored onions from Maharashtra.

According to Government data, India’s onion output in 2012-13 at 16.65 million tonnes, wasn’t much below the record 17.51 million of the previous year. Also, the fact that prices at Lasalgaon, Maharashtra’s and Asia’s largest onion market, averaged Rs 8 to 8.50 a kg till mid-May shows the crop wasn’t bad. What, then, explains the same Lasalgaon prices now touching Rs 45/kg?

The last time when wholesale prices rose so much — consumers paid Rs 100 then — was in early January 2011. But that was a year when crop in South India was hit, especially by floods in Andhra Pradesh. The country’s entire requirement had to, then, be met from stored Maharashtra onions, allowing the traders at Lasalgaon to make a killing. But this time round, no such production disruption has happened; the kharif crop from the South is yet to be harvested.

It only points to the power of traders, who would have bought at Rs 8 in early-May and stored to create artificial scarcity after July — when crop arrivals stop and the festival season takes off with Ramzan/Id-ul-Fitr!

They couldn’t have done all this if FCI, Nafed or NDDB were also active in buying and stocking onions.

Also read: > Are high vegetable prices here to stay? - YES