While the deflation in vegetables is offsetting to some extent the sharp rise in cereal prices and keeping the overall food inflation in check, the fall in prices of key vegetables is causing distress among sections of the farming community.
Bumper harvests leading to glut in supplies have pulled down mandi prices of potato in the last one month, while onion prices have continued to be depressed for several months, forcing many farmers to resort to distress sale in the key producing states of Uttar Pradesh, West Bengal, Maharashtra, Gujarat and Madhya Pradesh.
Since the announcement of `300/quintal of onion subsidy (an additional subsidy of `50/quintal was announced on Friday) to farmers by the Maharashtra government and the West Bengal government fixing a minimum procurement price (MPP) at `650/quintal for potato earlier this month, prices have improved to an extent in these two states .
The average mandi prices of onion at Lasalgaon, the hub of the trade in Maharashtra, was `750/quintal on Friday. The prices had dropped to `500/quital last month because of bumper early kharif crops whose shelf life is less.
“Against the cost of production of `1000/quintal to `1200/quintal, the farmers are getting far less in the mandis,” Balasaheb Misal, former director, Manmard (Maharashtra) mandi board and an onion farmer said.
The estimated production of onion in the country during the 2022-23 crop year (July-June) is a record 31.8 million tonne (MT) against 31.7 MT reported in the previous year.
To deal with depressed prices, the government had directed the farmers’ cooperative Nafed and NCCF to immediately intervene in the market through purchase of onion from the farmers. So far Nafed has purchased 10,291 tonne of union from the farmers in Maharashtra at an average price of `900/quintal.
Currently average potato price at Agra is `800-850/ quintal against `1,400-1,600/quintal prevailed a year back. The average cost of production for the farmers in UP ranges between `800-900/quital.
“Farmers are now selling potatoes at `850-1050/quintal. They are able to earn profits,” West Bengal agriculture minister Sobhandeb Chattopadhyay told FE. Potato prices in West Bengal, the second largest potato producing state, crashed last month.
“Prices had been at around `550/quintal at the cold storage gate before the government declared the MPP. Prices had fallen this year as potato cultivation was higher compared to last year,” Patit Paban De, former president, West Bengal Cold Storage Association, said.
Vaibhav Sharma, a potato farmer from Agra, the hub of the trade, said at present harvested potatoes are being stored in the cold storages which will meet the domestic demand till October.
According to the department of consumer affairs, modal retail prices of onion and potato on Saturday have declined to `20/kg and `10/kg respectively from `35/kg and `16/kg prevailed a year ago.
In February, 2023, Inflation in potato declined by 7.36% and onion by 19.14% on year respectively.
The country’s potato output in the 2021-22 crop year (July-June) has declined to 53.6 MT from a record output of 56.1 MT in 2020-21.
Uttar Pradesh, West Bengal, Punjab and Bihar have more than 80% share in potato production.Maharashtra is the leading producer of the onions with 43% share in the country’s production followed by Madhya Pradesh (16%) and Gujarat (9%).