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When we are speaking about inflation, it covers the price increase of all the products. But 1 product price is always fluctuating with a big difference and many times don't follow this rule of inflation. This product is nothing but vegetables.
The price of vegetables is being basically determined by supply and demand. But there are some factors that are directly hitting the price range other than supply and demand.
India's vegetable Production in the year 2017-2018 raised many times compared to the total productions from 2013 to 2018. In the year 2018-2019 rate slows down a bit. This production rate is directly impacting the inflation rate.
Harvest duration from sowing seeds for tomatoes is 90 days. During the harvesting, farmers have to plough the land, sow the seeds, provide sufficient water and harvest the tomatoes. Looks like a simple procedure but the most challenging part is the maintenance of these crops until complete harvesting. From start to finish, farmers have the tasks like buying branded seeds which are promising high production. High production yield seeds need more water than usual. Manuring the soil will add to the cost of the production. When the crops started to grow, insects will be attracted and will try to survive with the growing crops. If farmers have to survive, they need to buy pesticides which are coming with branded price tags to get rid of those insects. With no option in hand, farmers need to spray the liquids till growth. When the time comes, he will start selling the tomatoes to a wholesale vendor. But the price will be based on supply and demand. During 1 month time, the selling price of the tomatoes from the farmers fluctuate with more than 300% price difference. But the price at the retail store to end consumers will not have this price difference since the local wholesale vegetable sellers will try to regulate the price which makes a profit for them. Farmers currently don't have any control over it.
While onion, on the other hand, people try to stock the big quantity and make the demand raise. After the
demand rose, they will sell the onion gradually with an increase in price. Recently 35000 kg of onion was found stored in Chhattisgarh without documents and officials imposed a fine since no documentation was provided. A joint raid by the food and supply department and the local police stated that Storage of such a large quantity is a violation and imposed a fine under the Essential Commodities Act. Deputy commissioner SS Phulia told that the huge quantity of onions was hidden in a large room without any licence or valid documentation. As of March 2021, inflation for vegetables was -2.90% but the prices of onion registered 31.28% inflation. This however is much lower when we compare the inflation rate in February 2020 which was at 162.30%.
Now states are trying to fix the minimum base price for the vegetables since the country is facing farmer protest.
The Kerala government had a fixed base price for 16 vegetable varieties produced in the state and it was implemented from 1st November 2020. The base price for vegetables was fixed after adding a 20 % price on the production cost of each crop.
Chief Minister Pinarayi Vijayan implemented this scheme via online and stated that the state government is extending a helping hand to the farmers by declaring floor prices to vegetables at a time when the country witnessed a protest by farmers. The government has taken the measure to support the farmers and increase production within the state. Conditions to revise the floor price of the products and grading system to assure quality were also added in the price scheme. The local self-government will coordinate the activities to procure the vegetables. In this phase, more farmers will be encouraged to continue on the field and more people will be influenced to turn farmers.
While price inflation is always a concern in any economy, we can't control the inflation globally but when the vegetables are involved, if the inflation helps farmers directly in their favor, we can welcome this inflation and it will eventually increase the farming lands India which is said to be the backbone of our economy.