Economic Survey 2022: Tomato prices spiked after the end of September 2021 owing to crop damage and delay in the arrival of produce in mandi because of unseasonal heavy rains in producing states of Punjab, Uttar Pradesh, Haryana and Himachal Pradesh, the survey said.
New Delhi: The Economic Survey for 2021-22 was tabled by Finance Minister Nirmala Sitharaman in Lok Sabha on Monday. This year, the Survey has been published only in a single volume, as opposed to the two-volume document last year. Nevertheless, the survey points out various important aspects of the Indian Economy.
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The prices of Onions and tomatoes, which were subjected to high volatility in 2021, have found a special mention in this year’s Economic Survey. The document has highlighted the ‘Seasonality and irregularity in the retail prices of tomato and onion’. This section has aimed at explaining the reason behind the volatility in onion and tomato prices in the country.
Crop Damage Due To Rains Pushed Tomato Prices
According to the survey, “Tomato prices spiked after end of September 2021 owing to crop damage and delay in arrival of produce in mandi because of unseasonal heavy rains in producing states of Punjab, Uttar Pradesh, Haryana and Himachal Pradesh. Pressure on tomato prices was further exacerbated due to disruption of tomato supply by heavy rains in in producing states of Tamil Nadu, Andhra Pradesh, Telangana and Karnataka.”
In November 2021, the prices of tomatoes touched Rs 100 per kg. The reasons for the rise were the supply-side constraints. Onion prices have also remained volatile for the past few months.
For Onions, on the other hand, the Survey said, “The seasonal component is found to put downward pressure (negative values in Figure 1D) on prices coinciding with the Rabi harvest period, and upward pressure (positive values) in other months, reaching peak in December.”
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Suggestions To Control Volatility
The survey also suggested some measures for the government to control the volatility. It noted, “Both seasonal as well as shock components contribute in the spikes of the tomato and onion prices. Seasonality in prices resulting from seasonal production patterns require policy attention. Strategies to incentivize production during lean season should be designed. Investments in processing of surplus production of tomato, and processing and storage infrastructure of onion must be promoted. Cutting wastage of the production, better supply chain management will also help in meeting the demand.”
