THREE vegetable products — now fondly called TOP (tomatoes, onions and potatoes) — have over the decades played havoc with the fate of ruling political parties in India. A spurt in their price prior to elections can demolish all efforts — and track record — of the ruling party during its outgoing five-year term.

Both the Congress (now in opposition) and the BJP have seen the electorate vote their governments out of power in several states as the price of any one of the three commodities soared just prior to the elections. Voters expectedly preferred removing the ruling parties instead of paying double or treble the rates for these ordinary items.

Way back in 1980, for instance, the late prime minister Indira Gandhi, who led the Congress, managed to come back to power (after being kicked out in 1977 for her emergency rule) by partly focusing on the high cost of onions under the then Charan Singh government.

Other prime ministers including I.K. Gujral (who headed the government from April 1997 to March 1998) and even Manmohan Singh (in office from 2004-2014) faced a lot of problems, especially during elections, with onion prices bringing tears to their eyes.

And in states like Delhi, Rajasthan, Madhya Pradesh and Maharashtra, chief ministers have, over the decades, had to pay a high price for not being able to control the price of onions (and to some extent tomatoes and potatoes).

One BJP chief minister in Delhi was thrown out of office by the party after he claimed that the poor did not eat onions.

With elections around the corner — the general elections are due to be held in April-May, but the electorate in five states including Rajasthan, Madhya Pradesh, Chhattisgarh, Telangana and Mizoram will be voting in November and December — political parties are once again worried about the volatility in prices of onions, potatoes and tomatoes.

The last few days have seen onion prices soar to more than Rs40 a kilo as supplies from Lasalgaon in Maharashtra — one of the largest producers and suppliers — have come down sharply.

Strangely, onion production is not expected to fall so dramatically as to result in a spurt in prices. According to government estimates, onion production for the year ending June 30, 2018, is expected to be around 22 million tonnes, marginally lower than 22.4mt in 2016-17.

India is one of the leading producers of onion; production has shot up from a little over 5mt in 2002-03 to more than 20mt now. Per capita consumption of onions has also jumped from four per kilogram about 15 years ago to 13 per kg now.

But production of the three TOP items has declined marginally in the 2017-18 crop year. According to the agriculture ministry’s third advance estimate, while onion output will be around 22mt, potato production will remain at around 48.5mt and tomato down by more than a million tonnes at 19.4mt.

Voters have preferred removing ruling parties instead of paying double or treble the rates for tomatoes, onions and potatoes

Farmers in states including Haryana, Uttar Pradesh, Madhya Pradesh, Maharashtra and Karnataka have been dumping their harvest of TOPs over the past few months as wholesale prices had plunged lower than even production and transportation costs.

WORRIED over the plight of TOP farmers, the union government last week finally cleared a Rs5 billion project that aims to stabilise supply and price of these three vegetables.

Finance Minister Arun Jaitley in his budget in February had announced the launch of ‘Operation Green’, — on the lines of Operation Flood, which has made India the world’s largest producer of milk — which was finally rolled out by the government last week.

Harsimrat Kaur Badal, the minister of food processing industries, says that price volatility of TOP crops wreaks havoc on ordinary citizens. ‘Operation Green would ensure that TOP products reach all households round the year,” she says.

The government plans to set up farm gate infrastructure, storage capacity-linking consumption centres, besides agro-logistics, to reduce post-harvest losses. Farmers will be brought closer to the marketplace thanks to better logistics and processing facilities.

Nearly two-dozen pre-identified hubs in 20 states will be set up, increasing the shelf-life of the perishable crops. The new scheme will also ensure quick movement of the products to states facing a shortage of the vegetables.

According to Badal, there will be a 50 per cent subsidy for hiring storage facilities and transportation. One of the major reasons for the hefty price swings of these products is the lack of cold-storage facilities.

The National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) is the nodal agency for implementation of price stabilisation measures. The government will share half the cost of transportation and storage for TOP products along with NAFED.

While Rs500m has been allocated for this work, the bulk — Rs4.5bn — is for developing the value chain including cold storage, packaging, sorting, grading and processing.

The farm gate infrastructure, agro-logistics and storage capacity is expected to reduce post-harvest losses, besides raising processing capacities and value-addition.

Of course, ministers like Ms Badal claim that the NDA government has focused a lot on food processing, which has resulted in a sharp fall — up to eight per cent — in the level of food wastage over the last four years.

A ‘Pradhan Mantri SAMPADA (Scheme For Agro-Marine Processing And Development Of Agro-Processing Clusters) Yojana’, costing around Rs60bn, is helping set up mega food parks, besides backward and forward linkages and clusters.

About 15 mega food parks are already operational in the country and about 280 cold chains have also been set up, with about 60pc of them becoming operational.

Published in Dawn, The Business and Finance Weekly, November 12th, 2018



Kindness needed
20 Jun, 2024

Kindness needed

TODAY, on World Refugee Day, we pause to reflect on the many challenges faced by refugees across the globe. From...
Fitch’s budget note
20 Jun, 2024

Fitch’s budget note

PAKISTAN’S ongoing economic crisis is multifaceted. At one end, the government must pursue stabilisation policies...
Cruelty to animals
20 Jun, 2024

Cruelty to animals

TWO recent incidents illustrate the immense cruelty many in this country subject voiceless animals to. In the first...
Price bombs
Updated 18 Jun, 2024

Price bombs

It just wants to take the easy route and enjoy the ride for however long it is in power.
Palestine’s plight
Updated 17 Jun, 2024

Palestine’s plight

While the faithful across the world are celebrating with their families, thousands of Palestinian children have either been orphaned, or themselves been killed by the Israeli aggressors.
Profiting off denied visas
Updated 19 Jun, 2024

Profiting off denied visas

The staggering rejection rates underscore systemic biases in the largely non-transparent visa approval process.