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Hoarding, exports and outdated agricultural marketing laws are keeping vegetable prices from easing up in Delhi according to officials who have ruled out a fall in output or smaller harvests.
Price of tomatoes have shot up to Rs. 80/kg from about Rs. 58/kg last week and a senior agriculture ministry official said a major reason for this was an outdated Agriculture Produce Marketing Committee (APMC) Act, which is preventing farmers from directly selling their produce in the Capital.
Older APMC laws make it mandatory for farmers to sell all produce through local committees.
Prices could have been controlled had the Delhi government amended the APMC Act and encouraged more players, agriculture secretary Ashish Bahuguna said.
Delhi’s minister for food and civil supplies Harun Yousuf also blamed diversion for exports to Pakistan for high tomato prices.
There is no reason for the government to export any of these produce. Traders make a huge profit margin by exporting these crops. There is no short supply as is being alleged because there is a surplus tomato crop this time,” said Haroon Yusuf, minister of food and supplies in Delhi.
Union minister of state for agriculture Tariq Anwar too said issues with supply chain and how they are being governed were fuelling prices. “We know that there are governance issues related to licensing of wholesalers, issues related to holding capacity of farmers, issues related to market prices information and a number of issues related to the whole supply chain which creates the kind of pricing contradiction,” Anwar said on Friday.
Officials said the government ought to increase the price minimum price below which traders won’t be allowed to export tomatoes, which would make Indian tomatoes expensive for foreign buyers and cheaper at home.
“Tomatoes are being directly exported to Pakistan. When procurements are dispatched from fields, traders divert the produce for countries such as Pakistan and Bangladesh where they are sold at a much higher price than in India,” said Bijender Singh, chairman, National Agricultural Cooperative Marketing Federation of India Limited (NAFED).