Perishables, the thought

The reasons may vary every year, but the end result is the same. This year, a delayed monsoon and higher fuel costs are the villains.

The reasons may vary every year, but the end result is the same. In what has by now become an annual monsoon ritual, prices of perishables like vegetables, fruit and milk have once again shot up. This year, a delayed monsoon and higher fuel costs are the villains. Last year, a similar upsurge was attributed to unseasonal rains in vegetable producing areas. The year before that, a transport strike. These, however, offer explanations for the symptoms and are not a diagnosis of the core problem. Over the past few years, India’s food consumption market has undergone a significant and permanent change. The previous generation of consumers grew up in an environment of shortages and seasonalities. Foodgrain supply (and prices) fluctuated with the monsoon’s behaviour. Fruit, vegetables and other perishables were strictly seasonal, since neither farmers nor the distribution system had means or the technology to ensure year-round production and storage. Mangoes were a summer fruit, cauliflower a winter vegetable.

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There was no unseasonal demand for items that consumers knew would not be available and hence there were no major price fluctuations, except in basic staples like onions and potatoes. Today, consumer mindsets and expectations have both changed. Thanks to advances in agriculture, the development of cold storages and supply chains and, of late, limited imports, an year-round supply is not only possible, but is taken for granted. So when distortions take place on the supply side, there is an immediate impact on prices.

This is an opportune time for framing a holistic food policy that goes beyond cereals, pulses or sugar. The government has already been taking several proactive measures in this regard. The recent moves to import wheat and sugar will help stabilise prices and also prise open the stranglehold of vested interests in these markets. Even today, the farmer gets a little over Rs 11 per kilo of tomatoes, while the consumer pays Rs 45. A comprehensive package of open-market imports, creation of reliable storage and distribution infrastructure and a more transparent and fair market system are urgently required. Knee-jerk criticism of the government’s reform in this area will achieve little more than the soothing of ideological egos. The Indian farm sector has shown time and again that given the right support and market access, it can compete with the world on an equal footing and drive growth in the process. It is time both the farmer and the consumer got a better deal.