Farmers across India are battling a steep fall in wholesale vegetable prices and are forced to discard their produce as a nationwide cash crunch following the scrapping of high-value banknotes hurts demand.
The crash in wholesale prices comes at a bad time for farmers, who reaped a bumper crop and were hoping for good returns to make up for losses induced by two straight drought years.
Last Wednesday, S Raju, a farmer from Anantapur district, brought around two tonnes of tomatoes to Bowenpally market in Secunderabad but had to return home empty handed.
Raju said he spent nearly Rs 4 per kg to raise the tomato crop and it cost him another Rs 2 per kg to transport the produce to Secunderabad, more than 400 km from Anantapur.
But he was shocked when traders at Bowenpally offered not more than Rs 2 a kg for his crop.
Raju realised the price quoted was not sufficient even to meet the transportation cost, as he had to travel back to Anantapur.
Frustrated, he unloaded boxes of tomatoes and dumped them in the market yard, before cursing the traders and market authorities. Some vendors picked up tomatoes for free, while cattle feasted on the remaining dump.
“Apparently, he has come all the way to Hyderabad, because tomato prices came down drastically in Anantapur market,” Srinivas, a local commission agent, told the media.
The situation is similar in other parts of Rayalaseema that are known for production of tomatoes.
The state government has approached several potato-deficit states, offering them to lift surplus potato from the state at an affordable rate in a bid to help its farmers get a better price.
The government move comes amidst prevailing low prices of potato that have added to the plight of farmers. “The state government has written to potato-deficit states like Karnataka, Kerala, and Tamil Nadu, telling them they can procure potato from UP,” horticulture director SP Joshi said.
Joshi also blamed farmers, saying they erred in anticipating the price. “Potato was selling for Rs 1,500 per quintal till July-August but most farmers chose to sit on the stock, guessing the price will go up further. That did not happen and a new crop of potato from within and outside the state also arrived, compounding the price situation,” he explained. UP accounts for 35-40 % of the country’s potato production.
For the second time this year, onion farmers of Mandsaur-Neemuch belt are forced to sell their crop for as low as Rs 1 per kg. Many are abandoning their produce and the main culprit appears to be demonetisation, say those associated with the trade. Explaining the impact of the move, an official said small traders, who bring in supply from marginal farmers, have vanished due to shortage of cash and big traders seem to have formed a cartel.
Cashless transactions could bring traders under the I-T department’s scanner — which they don’t want — the official added.
State horticulture director Satyanand, however, blamed local factors for the crash, saying there was no spike in supply. In April, the government procured onions for Rs 6 per kilogram after prices fell to 25 paise per kg in Neemuch.
Lalaram Bhatt, a farmer, was in tears after hearing about the price crash. “We are already facing cash shortage problems due to demonetisation and this fall in onion prices is a double blow. At these prices, we won’t be able to pay even for transport,” he said.
High cauliflower yield coupled with a cash crunch after demonetisation has sent wholesale prices crashing in Bihar. Farmers in Patna, Vaisali, Muzaffarpur and other districts are forced to sell produce at throwaway rates. On Saturday, the price of the seasonal vegetable was at its lowest — Rs 10 – Rs 15 per kg — in major retail markets. In wholesale markets, the price was almost one-third.
“This time, there has been a bumper production, especially in the last leg of the harvest. This is probably the reason for falling prices,” said Ranjeet Kumar, a vegetable retailer.