Inflation | Experts warn about food inflation as farmers begin reducing area under vegetables
Pune: While overflowing granaries and a good onion crop will stay India in good stead for the monsoon season, farmers choosing to reduce area under vegetable crops to reduce risks could boost food inflation after 4 to six months, experts said.
“We have to be ready for tremendous inflation for perishable food products in future as farmers would be investing low in such products,” said S Sodhi, managing director, Gujarat Co-operative Milk Marketing Federation (Amul).
Sodhi gave example of the poultry sector. “We can see this happening in poultry industry. Chicken prices had fallen after Covid-19 scare, forcing farmers to reduce production. Now, as demand for chicken has started increasing, we see that the poultry prices have started rising. The implication of the present hardships being faced by farmers is that they will reduce their risks, the results of which may become be visible after 5 to 6 months,” he said.
Farmer leader Ajay Vir Jakhar too think that prices of vegetable are bound to increase after 4 to 6 months. “Consumers may have to pay high prices for their daily vegetables 5 to 6 months from now as farmers, who have suffered losses in vegetables now, will definitely tend to reduce their risk by reducing the area under vegetable crops. But government cannot do much in this,” said Jakhar.
Farm producers are now contemplating the next course of action. Ankush Padvale, a progressive farmer and chairman, Maharashtra Organic and Residue Free Farmers Association, said many farmers are inclined to reduce area under vegetables.
“We grow vegetables keeping the markets in big cities like Mumbai and Pune in mind. The way Covid-19 cases are growing in big cities, the disturbances in demand are likely to continue for next few months. If some areas remain sealed, then the supplies to that area also reduces. I have green chilly seedling ready for transplantation on 4 acre area. But I have been delaying it and may not transplant if situation worsens,” said Padvale, adding, “So if, after a few months, if the demand for vegetables suddenly goes up, there could be shortages and rise in prices.”
Many farmers from Narayangaon tomato belt of Maharashtra have already reduced planting of tomatoes. “Due to the losses suffered now, many farmers from our area have reduced area under tomatoes. We may feel shortages in July, August and prices may rise,” said farmer Ajay Belhekar from Narayangaon.
Shripad Markhelkar, manager agronomist, Skymet Weather, observed that at many places farmers, who had planted vegetables on large areas, have been unable to sell them even at throw away prices.
“This will definitely result in shortages in supplies of some vegetables after 2 to 3 months,” said Markhelkar.
“We do not see any inflation in food grains thanks to good rabi harvest and good stock with the government. Logistics is playing havoc in reaching food from farm to the fork. People at both the ends are unhappy. If there are supply shortages in vegetables, it may lead to volatility in prices,” said Dharmkirti Joshi, chief economist, Crisil.
The seed industry is also concerned about the possible impact of the lockdown induced crash in vegetable prices.
“Government will have to play a big role in making assessment of the losses of farmers and ensure they get some minimum remunerative price to prevent them from shifting away from vegetables. Once prices rise due to shortages, there is not much that anyone can do,” said Prabhakar Rao, president, National Seed Association of India.