Tomatoes in red zone

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Tomatoes in red zone
Narayan Krishnamurthy - 27 July 2017

An innocuous notice outside a McDonald’s outlet caught my fancy a few weeks ago – it said they were not serving tomato in the burger because of irregular supply of the red fruit. Yes, tomato is a fruit, just in case you have any doubts. So, when I reached the counter to place my order, I asked forthright if there is a discount in the burger price without the tomato. The girl behind the counter was dumbfounded with my query, which was then answered by a superior who said, I could have the fries on the house instead, but that there was no discount in the burgers because of missing tomatoes.

I bet the large family that had ordered just before me would have been up in arms figuring out the deal I got. Anyway, I had my takeaway from someone else, who was pleased to get the fries without being asked for. The experience also taught me something else, that I was wrong at rubbishing claims of people about doubling their investments in short time frames. Going by the meteoric price rise of tomatoes, prices have already doubled this month and if I were to take mid June as the base, it is four times up. No wonder the wholesalers have armed guards at their storehouse.

Harmless loan waiver

The inclusion of onions and tomatoes in most Indian meals is to make them look fuller with the addition of these two independently or jointly. Mostly, tomatoes are added for taste, but you get the drift on the role it plays in our daily dose of food intake. One of the reasons why the prices of fruits and vegetables like onions and tomatoes fluctuate is to do with the fact that farmers no more need to sell their produce to traders licensed by the Agriculture Produce Marketing Committees (APMCs), at least in several states.

While the farm loan waiver is still continuing, my guess is that high prices are still cartel controlled and the farmer is not receiving any of the gains from the high prices. Perhaps, it is time the government stepped in with the right earnestness to ensure farmers are well compensated and not made to face loan defaults—by buying the entire produce of farmers and using its own sales channel to distribute fruits and vegetables. In doing so, the government (not the FCI or any such agency) would not only gain first-hand experience on the problems faced by farmers, they would also be more generous with the minimum support price for even fruits and vegetables.

By buying out the farmer’s produce, the government will ensure that prices are maintained at levels which are uniform across the country, given that everything else these days is being quoted in the one-nation, one-tax mode. At the same time, in doing so, the government could ensure that farmers are not burdened by extensive borrowing and then facing the consequences of loan repayment. In one stroke, the government would have addressed the concerns of farmers and consumers of farm produce. It would also do itself some good in managing inflation levels.

For now, my attention is divided between rising stock market indices and tomato prices in the race for a winner; in the short-term my bet is on tomatoes.


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