Lower production could spike vegetables prices in coming months
NEW DELHI: The price of vegetables, particularly onion, could rise in the coming months as the government has estimated that output is slightly lower than last year. Horticulture output has not kept pace with the robust growth in the estimated production of foodgrains and oilseed in the crop year to June 2017, advance estimates of the agriculture ministry showed on Friday.
Production of vegetables is estimated to be around 168.6 million tonnes which is marginally lower by 0.3 per cent than the previous year, according to the agriculture ministry’s first advance estimates of horticulture crops. Out of this, production of onion is estimated to be around 19.7 million tonnes which is 6 per cent lower than the previous year.
The area under planting has also come down for onions by 10 per cent to 1.19 million hectare over the previous year, which officials says was largely seen in the rabi (winter) planting. The rabi crop whose planting continues in most part of country hits the market by April-June. The crop is important as it is stored in cold storages and consumed till the kharif harvesting begins in October-November.
“The drop in planting or production is a failure of system which could have used the price stabilisation fund to procure onion, potato and other vegetables when they were being sold at rock bottom prices or thrown on roads by farmers as seen in the past few months. This will result in price hike of vegetables in the coming months,” said Ashok Gulati, agricultural economist and former chairman of the Commission for Agricultural Costs and Prices.
Gulati added that the similar vegetable production levels over the previous year showed that low prices of vegetables had dissuaded farmers to grow more and they must have moved to pulses crop whose returns were higher. “The government has been stating that diversification to horticulture crops will ensure farmers income to double, but looking at volatility and downswing in prices it doesn’t look so. The demonetisation was the last nail in the coffin,” he said adding that focusing on food processing and cold storages was the only solution for growth in production.
An agriculture ministry official said that the figures were estimates and could change with planting of onion in progress. “We may revise the figures. It’s typical that one year production is higher and prices fall and farmer shifts to another crop. However compared to the past 5 years average onion production is about 5 per cent higher,” he said. CB Holkar, former chairman of Nafed, feels that the government was not giving correct picture of crop production. “The rains were late in the previous year, but onion planting in kharif season has been good. A fall in prices in wholesale could have impacted rabi planting, but it’s too early to say that production is less,” he said.
Source: ECONOMIC TIMES