A new public stocking policy centred on pulses, edible oils and vegetables is needed to manage unseasonal price hikes

News: Unseasonal price spike in Tomatoes and onions

The cost of many vegetables such as tomatoes, cabbage and other greens become relatively affordable during winter. This is because of increased supply, since planting of these crops is done during August-October, and they are all 50-to-100-day crops.

But in the current winter, all these vegetables are being sold at high prices.

What is the reason behind the deviations in prices?

Erratic rainfall: For instance, Maharashtra recorded excess rains in September and October, hitting production of both kharif onions and tomatoes. Whereas, in the south, due to excess rains in November standing kharif tomato crop suffered extensive damage.

What are the implications?

Impact on inflation and, inflation expectations among the public: Increasing inflation for vegetables at a time when there is a sharp increase in petrol, diesel, LPG and edible oil prices costs the poor more. Further, it becomes more difficult for the RBI to continue with its accommodative monetary policy stance.

Concerns over Long-term impact due to climate change: This is a second successive year when the south India has had heavy unseasonal rains in September-October, destroying the harvest-ready kharif crops.

What is the way forward?

First, need for a new public stocking policy away from rice and wheat to pulses, edible oils and vegetables that are more vulnerable to climate and global price risks.

Second, Vegetable storage can even be done in dehydrated/processed form such as potato flakes, onion paste and tomato puree.

Source: This post is based on the article “A new public stocking policy centred on pulses, edible oils and vegetables is needed to manage unseasonal price hikes” published in Indian Express on 29th Nov 2021.