A friend who owns a small farm on the border of Delhi asks me to bring a large bag because we are ready to meet in the place of a mutual friend. He loads me with four kilos of ripe tomatoes, and I have to say “stop”, while parts of my rich crop are found before and after.
Tomatoes are selling cheap and cheaply across India this summer, and, as they say, there is a problem with considerable problems, thanks to crop rotation, hybrid seeds and reward of nature. Wholesale prices have crashed in many places, putting farmers in a state of crisis, which in turn, has blessed the country’s wholesale price index in the benign region.
Retail prices vary between areas. As I write this, it is as high as Rs 90 per kg in Himachal Pradesh, but only Rs 19 in Tamil Nadu and Rs 30 in Chennai. Others come in the middle. Online retailers are selling it around Rs 25 per kg.
Less than a year ago, in the end of 2024, tomato prices rose across India, beyond Rs 65 in Delhi and Rs 100 at some places. And the big, tomato prices have been frantic-depressed in recent years and farmers are a confused.
Wholesale prices in interior mandis are between Rs 7 to 27 per kg. Reports from Karnataka in Karnataka said that a few weeks ago this price was reduced by Rs 2 per kg in Dharmapuri, Tamil Nadu and Rs 6.
What is really going on?
Tomatoes are not only vegetable crops that bring pain to farmers. I look at the farmers of potato across the border ride border border border border border border border border border border border border border border border in this month at Rs 8 per kg. In Bengal, Capsicum wholesale prices crashed to Rs 6 per kg, indicating government action to help farmers with a rare event for vegetables in India, a minimum support price (MSP) program. In Punjab, farmers sold capsicum for Rs 2 kg last month below Rs 25 a year ago, and compared it to a free cheap.
To shorten the long story, vegetation farmers in India do not enjoy the price support of rich by wheat, rice, pulses and oilseeds, and resulting in gambling with different types of seeds with nature and high yield.
Learn from amul
The Amul story is now part of Indian folklore, in which milk is growing a lot due to scattering. It was all thanks to a cooperative movement, combined with the prices and logistics of purchases for milk, which helped farmers to develop and consumers to develop ice cream easily and cheaply available from struggle for mother’s milk option.
Now whatever we need is a similar mechanism for vegetables. But this is not easy. Vegetables are bad like milk. Cold chain logistics are launching only in India, and they add the costs of farmers that are more often less than cash or living power. They gamble with nature and launch their products at the best available price as soon as possible.
I have recently seen the report of throwing unusual tomatoes to the farmers of Tamil Nadu as the price is not correct. It brought back the developed memories of the European Union in the 1980s, when “Butter Mountain” and “Wine Lake” became popular expressions, thanks to the price support introduced by European governments. The wastage of agricultural products was common. I never thought that India would reach that stage with millions of people, so soon.
Agricultural products, especially vegetables, can be uncertain in supply, thanks to the vagina of nature, such as unexpected rain and difficulties of pests and transportation and sales methods. RK Narayan said about ‘Gods Well’ with crops in a short story of another world war, which is even more true for vegetables about a rice merchant: “His reward was unacceptable as his Parsimony.”
A new variation of ‘Green Revolution’?
Can the government do anything about this? The recent West Bengal example of Shimla Chilli and Amul Story gives us some inspiration. However, the government will have to worry about both fiscal cost and storage logistics. Storage of grains has been quite challenging. What we can do can be a market -making mechanism, in which state -backed cooperatives carefully buy and sell vegetables on marginal profit. However, this cannot happen if consumption is very low, as there will be no one to take the yield. What the government may probably do, I would call “proxy pricing” – offering sub -species of interest rate to exporters and linking to credit for crop insurance can mix easy credit features. I am thinking something loud here – with the idea that the government should now hire experts to fashion a new version of the green revolution.
Agriculture runs on a criterion between the consumer and the farmer. The old saying, “The price of a man is another man’s income”, needs to be kept in mind because a glut is bad news for the farmer, and so it is lacking, because what he wants is an ideal price-lecracy combination. Here the government needs to start a combination of storage support and fall price mechanisms – and is very common in vegetables. Integrate the country in a logical network to avoid gross deviations in prices.
Beware of ‘cobra effect’
One remembers how Prime Minister Narendra Modi was forced to withdraw the controversial bill related to agricultural trade as it was widely considered as handing over business to large retailers.
However, a study by the Reserve Bank of India (RBI) last year said that farmers get only 33% price that pays for a retail consumer fruits and vegetables, while it is more than 70% in terms of dairy products. The Amul model, in which farmers and cooperative societies receive important prices, should work if well designed.
There is also a “cobra effect”, which should be noted – a reference in management science for the British Raj’s position when the government’s plan to kill the cobra with a price encouragement for dead snakes was breed the cobra! Punjab’s recent capsicum glute has been linked to government efforts to promote crop diversification. We need a efficient transition on a middle path from a glut where consumers and farmers are in harmony.
(Madhavan Narayanan is a senior editor, writer and columnist with more than 30 years of experience, who works for Reuters, The Economic Times, Business Standard and Hindustan Times after starting in the Times of India Group.)
Disclaimer: These are the personal opinions of the author
