Millennium Post

Vegetable price blues

Vegetable price blues
It is regrettable that there has been a huge jump in the prices of essential vegetables, such as potatoes and tomatoes, in the last fortnight, across the country. The cost of vegetables has gone up by as much as fifty per cent, and has become a burden, especially on those whose incomes are not high. This spike in the prices has been blamed on a delayed and deficient monsoon which has resulted in lower production, leading to a supply crunch. This is, in part, true. The Indian Meterological Department has noted that, though monsoon rains have covered the entire country, it is still deficient by 23 per cent. This must have impacted vegetable production. Yet it is also true that this is not the first time that vegetable prices have risen this year. Inflation had moved up by  7.23 per cent in April this year in part owing to a rise in the prices of vegetables. Vegetables turned costlier by 60.97 per cent during that month while in March the rate of the price rise in vegetables was 30.57 per cent. It would therefore appear that the rise in vegetable prices in only in part seasonal and is more sustained. A likely cause is that the input costs in vegetable prices  such as, those of fuel  and electricity, have gone up. The cost of production in farm economics is more than the realisation, and, with yields falling, the farmers are left struggling. There are also problems in supply chain running from the farmers through wholesalers to retailers, with there being the possibility of hoarding to manipulate prices. With this being the case, vegetable prices would have risen even had there been a normal monsoon.

A concern, therefore, is the possibility of a sustained inflation, particularly if supply shortages continue to occur frequently. Prices may not reduce to the levels of last year as  farmers, having seen increasing crop disruptions, demand higher prices  to create a safety net for themselves for a bad year and as the supply chain continues to extort profits. Government interventions, such as export bans are only likely to provide temporary relief to consumers. Therefore, the government must intervene more deeply into the economy of the supply of vegetables so that their prices stabilise, thereby giving relief to consumers.
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