Lessons from Rs 2 – Rs 100 Tomato pendulum
The retail price of tomato has hit a high of Rs 100 per kg in Tamil Nadu just a couple of months after prices dropped to as low as Rs 2 per kg. There were reports from across the state about how farmers dumped thousands of kilos of tomatoes on the roadside or allowed them to rot in the fields due to the absence of remunerative prices.The highly unpredictable template of prices hitting zenith and nadir seems to be running in a loop, squeezing household budgets and fuelling overall inflation. As per 2020 estimates, Tamil Nadu stands fourth in the country in tomato cultivation with an annual production of 15.92 lakh tonnes and 52,898 hectares of land under the crop. The total cold storage capacity in the state for all the agriculture produce is only 17,527 tonnes.
Incidentally, domestic retail inflation surged to 7.79% in April, the fastest pace in eight years, causing a hike in food prices. Experts have warned that prices are likely to increase in the next few months due to rising costs of farm inputs like fertilisers, weather-related disruptions and surging international crop prices due to the Ukraine war. The steep fluctuation of prices in a crop whose consumption and cultivation cycles are well documented speaks volumes about the patchy intervention measures taken over the years. From farmers to consumers, everyone in the production-consumption cycle seems to be losing out in the zero-sum game where crores worth of crops get destroyed every year in the absence of price-stabilisation measures.
While farmers demand a MSP-like system tried in Kerala to ring-fence them from the vagaries of prices, a more prudent approach would be to set up a bigger cold storage chain and facilities that make value-added products have a longer shelf life. Incentives such as interest subvention and soft loans should be extended to establish them in both production points near a cluster of villages and distribution points such as huge markets. The collective stock level of the crop must be publicly shared so that farmers can plan their cultivation, and traders and consumers can have access to the staple food without disruption all through the year.