The Curious Case of High Vegetable Prices in Winters

The number of storehouses needs to increase so farmers get a fair income and customers get fair prices.

Vegetables are usually cheap in winters. But this season, vegetables are costlier than last year. The prices of some vegetables have even gone higher than what they were during summer months.

In winter, the supply of vegetables – such as tomatoes, peas, carrots, cauliflower, cabbage, radish and capsicum – increases. Summer vegetables, such as cucumber, gourds, ladiesfinger (okhra), and tinda, are of course a little expensive now, but that is because they reduce the yield and supply of these vegetables. But this time, the picture is different.

According to a report in The Indian Express, the average retail prices of most vegetables in Delhi are much higher than November 2016 and June 2017.

What’s With the Price Rise?

Except onions, most vegetables prices are oveer fifty rupees per kg. What has happened to keep prices high in this season too? According to experts, there is heavy rainfall in some states of Maharashtra, Karnataka and Andhra Pradesh, which has affected the crops of tomato, onion, capsicum and spinach.

But the prices are going up in the mandis of the whole country, and most of the supply is local. Obviously, there are many other reasons behind this untimely increase in vegetable prices in the country. According to Vijay Sardana, agricultural business expert, the reasons are:

1. The imbalance between supply and demand
2. Weakness in supply chain and storage infrastructure
3. Demonetisation and GST

These three reasons are interlinked. It is not that the yield of vegetables in the country is less than demand, but rather that the erratic supply (both in time, and quantity) increases the price for consumers.

Storehouses function without proper arrangements. That is why crops are kept in the fields for many days more than required, or the farmer sells them to middlemen for a negotiable price.  

But there is no assurance as to what price the vegetables will fetch when they reach the consumers. If there are arrangements for storehouses, then not only do farmers get their fair amounts, but even customers get their vegetables at reasonable prices.

Demonetisation and GST Play Spoilsport

Vijay Sardana points to another important fact. He says, "after demonetisation and GST, the market manufacturers and the businessmen have become more conscious. One reason for this is the limitation on cash, and the fear of unnecessary interrogation from government officials. "

Before demonetisation and GST, all businesses used to run on raw receipts and cash, but now that’s not possible.

Vijay Sardana, Agriculture Trade Expert

Cash cannot be used as before, and old traders are not buying, selling, or keeping their stock of open crops or vegetables as before either.

The traders in the market are not educated enough to understand GST and they also do not know how to operate a computer... in these situations they are being more aware until they understand and know how to run their business in new ways.

Vijay Sardana

The result of all this is more fluctuation in the prices of vegetables and other commodities. Since vegetables cannot be kept for long periods, they are feeling the effects the most.

Agricultural experts are warning that unless the government understands the ground reality and makes necessary changes to its policies, such fluctuation will only continue. To deal with inflation in onion prices, the government has the option of importing. On Wednesday, the government announced that 14,000 tonnes of onions would be imported. But to overcome the inflation of other vegetables, it will have to come up with long-term measures.

(This was originally published in QuintHindi)