growers’ income will rise four times if their produce is processed and marketed as puree or ketchup. Onions can also, likewise, be sold as paste or powder. But the question is: How much demand exists for that? At the end of the day, the bulk of TOP produced by farmers will have to be consumed as plain tamaatar, pyaaz and aloo.
A more sensible approach may be reviving the old idea of instituting a Market Intervention Agency (MIA), on the lines of the National Dairy Development Board vis-à-vis oilseeds and edible oils during the late-Eighties and early Nineties.
Today, we have no organised players in fruits and vegetables big enough to influence prices. Reliance Fresh does an annual business of 250,000-300,000 tonnes in this segment. The corresponding volumes of Aditya Birla Retail (More) and Mother Dairy (Safal) range from 100,000 tonnes to 150,000 tonnes each, and 50,000-75,000 tonnes for Big Bazaar and BigBasket.
The largest onion and potato trader/commission agent at Lasalgaon or Agra, too, will not handle more than 150,000-200,000 tonnes in a year. This is unlike, say, milk, where organised dairies, both cooperative and private procure about 30 mt, a fifth of India’s production. The presence of organised players reduces price volatility to that extent.
A well-funded MIA would procure TOP crops in major mandis during the peak harvesting/marketing season and offload the produce gradually in the lean months. Such a pan-India agency must not, however, end up displacing private trade, like the Food Corporation of India did. Its role should be only to curb extreme price volatility, a la the RBI’s interventions in the foreign currency market. The MIA should buy potatoes from Agra at Rs 15/kg in February-March, to sell not at Rs 4-5 but maybe Rs 20-25/kg in July-August.
The government could also do away with stockholding, export and other trading restrictions. Once this happens, other government initiatives — be it promoting farmer producer organisations or connecting mandis through an electronic national electronic market to allow seamless flow of price information — will fall in place and pave way for a genuine Operation Greens.