Soon, your state government could be your vegetable vendor. In a first, state-run vegetable carts and bicycle vans will frequent the streets to supply key horticulture crops ? a prime driver of food inflation until recently ? to retail consumers to prevent a flare-up in prices while ensuring fair returns to farmers.
Each state will get funds from the Centre to focus on vegetable production, marketing and retail by setting up a dedicated cluster in a major city under the National Vegetable Initiative, a part of the Rashtriya Krishi Vikas Yojana, a senior government functionary said.
The cluster can be set up in the state capital or any other city with a population of over one million, or close to one million in less populated states. The aim is to keep vegetable supplies steady at urban centres that are worst affected by a price rise because of a fair distance from rural production centres, and also to offer remunerative prices to farmers by removing middlemen at different stages.
Agriculture secretary PK Basu told FE: ?We have started the process in all the states, but seven states are ahead in it. So, we will see tangible results in these states in this fiscal itself, in the sense that the cluster, vegetable carts and bicycle vans will be visible on the streets by March. The initiative is aimed at ensuring two things: fair price to farmers and assured supplies to consumers at reasonable prices.?
The clusters are expected to come up initially in Haryana, Gujarat, Maharashtra, Chhattisgarh, Madhya Pradesh, Andhra Pradesh and Bihar. Food prices in India recently showed moderation after remaining stubbornly high since a drought in 2009 clipped the summer harvest and demand remained string, forcing the Reserve Bank of India (RBI) to raise key policy rates 13 times since March 2010.
Opposition parties had stalled Parliament proceedings on many occasions in the past two years, protesting against the government’s inability to curb high food prices that hurt the common man the most. ?States have identified clusters as well as aggregators, then grading, sorting and storing, and the actual sale on streets through those carts, refrigerated small bicycle vans…. We will be monitoring the process. Money has already been provided, and the rest are the states’ initiatives,? said Basu. The Centre has offered R17 crore for setting up the cluster in a mega city, while some have got R12 crore each and others R10 crore from a total allocation of R300 crore this fiscal, he added.
The Union agriculture ministry expects such an initiative to also help establish an ?efficient supply chain, thereby leading to employment opportunities and incomes for intermediate service providers?, apart from developing technologies to enhance productivity in semi-urban areas of major cities.
?We are trying an experiment. Everybody is keen that vegetable is available. So, I expect it to be a success. Even if we start it well in seven states in the first year itself, it will be a big achievement, as implementation will be much faster the next year because teething trouble is gone,? said Basu.
Meanwhile, established retail players are not worried about their business being hit. Pradipta Kumar Sahoo, business head (horticulture), Mother Dairy Fruit and Vegetable Private, said: “In fact, it will be synergistic. The current retail market is huge but disorganised, and such a step will actually be complementary to our efforts to bring about the right ambience of modern retail to the fragmented market.”
Mother Dairy, the country?s first organised retail player, sells fruits and vegetables under the brand name of Safal at 400 outlets across Delhi and the NCR, accounting for around 40% of the organised market in the region.
It also has 25 big retail format stores in Bangalore.Food inflation remained in the negative territory for a third straight week, at -0.42% for the week through January 7, mainly due to a 45.81% slump in vegetable prices after summer crops eased supplies. Onion rates crashed 75.42% from a year before, while potato rates tumbled 23.84%. food inflation was more than 16% in the corresponding week last year.