Immediate challenge for Modi 3.0: Tackling vegetable prices amid heatwave

As a new government takes office in the country’s capital, rising food inflation will be a significant challenge in the coming weeks.

Among all crops, vegetable prices are particularly tricky to manage. 

Data shows that inflation in onions, potatoes, and tomatoes (which make up almost 60 per cent of the total vegetable production in the country) has been in high double digits since January 2024.

Traders mentioned that with the intensifying heat wave in the upcoming weeks, the possibility of prices decreasing is not very likely, although there might be a slight moderation.

According to recent data shared by the Ministry of Agriculture, the second advanced estimate predicts that onion production in 2023-24 is expected to be 23.21 million tonnes, which is around 6 million tonnes less than the previous year. Meanwhile, potato production is expected to be 56.76 million tonnes, 3.4 million tonnes less than last year. Only tomato production, according to the second advance estimate, is expected to be slightly more than last year, at 21.23 million tonnes in 2023-24.

Overall, the country’s horticulture production in 2023-24 is expected to be 352.23 million tonnes, less than last year’s 355.48 million tonnes. The data also shows that brinjal production is expected to be lower than last year.

Within the overall food basket, vegetables have been the most volatile, followed by pulses and oilseeds. Efforts have been made to boost vegetable production, but inadequate storage and improper distribution channels mean that large quantities of vegetables produced annually in India go to waste before reaching consumers.

According to a NITI Aayog analysis, by 2047, India is expected to produce 367 million tonnes of vegetables, which would be marginally more than the demand of 365 million tonnes. Residents in rural areas spend around 5.38 per cent of their monthly income on vegetables, while those in urban areas spend 3.8 per cent.

The role of schemes such as Operation Greens needs to be recalibrated. In the 2018-19 budget, the Union Government launched the Operation Greens scheme with an outlay of Rs 500 crore. Its objective was to stabilise the supply of tomatoes, onions, and potatoes (TOP) and control their price volatility.

The scheme has multiple components, including the Ministry of Food Processing providing a 50 per cent subsidy through National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) to empaneled agencies for the evacuation of TOP crops from production surplus areas when prices fall below the three-year average market price at the time of harvest, transportation of TOP crops from production to storage, and hiring appropriate storage facilities for these crops. 

The long-term objectives of the scheme are enhancing the value realisation of farmers by targeted interventions to strengthen production clusters and FPOs, and linking farmers with the market. 

Additionally, it aims to reduce post-harvest losses by creating farm gate infrastructure, developing suitable agri-logistics, creating appropriate storage capacity, linking consumption centres, and increasing food processing capacities and value addition in the value chain by creating firm linkages with identified production clusters.

Until May 2023, almost 46 projects worth around Rs 2300 crore are in various stages of implementation, with an eligible grant of around Rs 571 crore.

India’s horticulture production in 2022-23 reached an all-time high of over 350 million tonnes, surpassing food grains and cereals production by a significant margin. Up to 12-16 percent of the fruits and vegetables produced in India are wasted annually due to various factors. 

The total post-harvest losses of agricultural commodities were estimated at Rs 44,000 crores at 2009 wholesale prices. 

Stopping this wastage could be another way to boost supplies.