Vegetable prices in India are expected to remain elevated in the coming months due to above-normal temperatures until June, according to a report by Crisil. The India Meteorological Department’s forecast of an above-normal southwest monsoon in 2024 offers hope for a potential easing of prices post-monsoon. However, the distribution of the monsoon will be critical in determining the extent of relief for consumers.

DELHI VEGGIES PRICES UP AND DOWN DESPITE HEATWAVE

NEW DELHI: The onset of a heatwave across India, particularly in the northern plains, has caused discomfort in various regions, with the India Meteorological Department (IMD) forecasting severe heatwave conditions in the east and south Peninsular India. While Northwest India may experience relief with expected rainfall and thunderstorms, the intense heat poses challenges for vegetable storage and warehousing. Prices of main vegetables in Delhi’s Azadpur mandi have shown a mixed trend, with the Reserve Bank of India (RBI) warning of inflation risks due to extreme weather events. Additionally, a study by PUSAN National University in Korea highlights the heightened vulnerability of people with disabilities to heatwaves, with increased hospitalizations and medical costs, particularly for mental and respiratory diseases. Individuals with brain lesion disorders, severe physical disabilities, females, and those over 65 are particularly susceptible to heat exposure effects.

India’s vulnerability to climate change poses significant risks to vegetable production and prices, with rising temperatures exacerbating pest problems. In FY24, vegetables accounted for about 30 percent of food inflation, despite comprising only 15.5 percent of the food index. Surging prices of tomatoes and onions grabbed headlines, but other vegetables like garlic and ginger also saw triple-digit inflation. Erratic weather patterns have disrupted vegetable supplies, leading to price spikes in recent years. Short-term solutions such as buffer stocks and imports have proven ineffective due to the perishable nature of vegetables.

The lack of infrastructure, including cold storage facilities, further complicates the situation. Weather-induced supply shocks, coupled with uneven monsoon distribution, have kept pressure on vegetable prices high. In FY24, El Niño conditions and below normal southwest monsoon exacerbated the situation, leading to several price shocks. As India grapples with the challenges posed by climate change, addressing the vulnerabilities in vegetable production and distribution will be crucial to ensuring food security and affordability for its citizens.

The volatility in vegetable prices, often driven by weather-related factors, underscores the challenges facing India’s agricultural sector. With climate change increasingly disrupting weather patterns, the frequency and intensity of extreme weather events such as heatwaves, floods, and storms are on the rise. These disruptions not only affect crop yields but also exacerbate pest infestations, further impacting production and prices. In recent years, India has witnessed erratic monsoon patterns, with below-normal rainfall in some regions and excessive precipitation in others.

Such uneven distribution of rainfall disrupts planting and harvesting schedules, leading to supply shortages and price spikes. Additionally, prolonged dry spells followed by sudden heavy rains can result in crop damage and post-harvest losses, further exacerbating price volatility. The reliance on traditional agricultural practices and inadequate infrastructure exacerbates the challenges posed by climate change. Limited access to modern farming techniques, such as greenhouse cultivation and drip irrigation, hampers the sector’s resilience to extreme weather events.

Furthermore, the lack of adequate storage and transportation facilities results in significant post-harvest losses, contributing to supply shortages and price fluctuations. Addressing these challenges requires a multifaceted approach that encompasses both short-term and long-term strategies. Immediate measures, such as the creation of buffer stocks and import regulations, can provide temporary relief during supply disruptions. However, long-term solutions, including investments in climate-resilient agriculture practices and infrastructure development, are essential to building the sector’s resilience to climate change.

Enhancing the availability of cold storage facilities and improving transportation networks can help minimize post-harvest losses and ensure a steady supply of vegetables to consumers. Additionally, promoting sustainable farming practices, such as crop diversification and water-efficient irrigation techniques, can mitigate the adverse effects of climate change on agricultural productivity.

Moreover, fostering research and innovation in agriculture, coupled with effective extension services, can empower farmers with the knowledge and tools needed to adapt to changing climatic conditions. Collaborative efforts between government agencies, research institutions, and the private sector are crucial to implementing holistic solutions that address the complex challenges facing India’s agricultural sector in the era of climate change.

With the farm Acts no longer under consideration, the government might focus on reforming the input aspect of the agriculture sector, which includes regulations and rules governing seeds, fertilizers, and plant chemicals.

Sources said such a blueprint, which is aimed at making the life of farmers easier, with quicker approvals but not compromising on quality, is in the works as part of the 100-day agenda of Modi 3.0. Also, ways to administer fertilizer subsidy more effectively and cutting down on leakages and diversions to build on the success of neem-coated urea are being thought of.

Few years back, a proposal was mooted in some quarters to conduct a pilot in a few districts of the country on a modified version of the direct benefit transfer (DBT) that would establish some sort of linkage between land holding and the nutrient’s consumption.

Currently, the version of DBT in place involves farmers purchasing their fertilizers through point of sale (POS) devices after undergoing Aadhaar authentication. This ensures that the identity of the person who purchases fertilizer bags is well established. However, there is no restriction on the number of bags that each farmer can purchase. This sometimes leads to excess usage and chances of misuse.

In the case of seeds and plant chemicals, sources said lots of reforms are urgently needed as the regulatory and approval process in India takes a long time. This is because it involves multiple layers.

They said the government could look at creating a favorable policy environment for the agrochemicals sector. This would facilitate an increase in agrochemical exports and position India as an attractive destination for foreign investments. It would also safeguard the interests of small and regional players operating in the industry.

The current process for registration of a new agrochemical molecule in India is often perceived as time-consuming, costly, and a complex procedure by the industry. Only a few large multinational companies and leading domestic players can afford to invest in research and development (R&D) to develop new molecules and get them registered for manufacture and sale.

As a result, only around 280 molecules and 800 formulations (including combinations) are registered in India. Compared to India, this number is double in the European Union (EU) and triple in Japan.

India has authorized the export of a restricted quantity of onions to the United Arab Emirates (UAE) and Sri Lanka amidst stringent export regulations on the staple vegetable. The Ministry of Commerce and Industry, in coordination with the Directorate General of Foreign Trade (DGFT), issued a notification permitting the export of an additional 10,000 metric tons (MT) of onions to both the UAE and Sri Lanka, facilitated through the National Cooperative Exports Limited (NCEL).

This decision comes in the wake of India’s continued efforts to manage onion exports amidst fluctuations in domestic availability and international demand. In March, the Indian government had sanctioned the export of 50,000 tonnes of onions to Bangladesh.

However, despite these allowances, the Indian government has extended the ban on onion exports until further notice. Initially imposed in early December 2023 until March 2024, the ban has been extended indefinitely. Export permissions will be granted solely based on central government approval, considering requests from other countries.

The export of onions from India has been subject to various regulatory measures aimed at stabilizing domestic prices and ensuring adequate supply in the domestic market. In August, the government imposed a 40 percent duty on onion exports to curb price inflation and enhance domestic availability. Additionally, a Minimum Export Price (MEP) of USD 800 per tonne was set for onion exports, effective from October 29.

Notably, the export duty exemption was granted for ‘Bangalore rose onion,’ a specific variety with a Geographical Indication (GI) tag, subject to certification from the Horticulture Commissioner, Government of Karnataka.

In response to rising onion prices, the Indian government has been releasing onions from its buffer stock. The buffer stock, maintained to address supply shortages and stabilize prices during lean seasons, has been expanded to 300,000 tonnes for the 2023-24 season, up from 251,000 tonnes in the previous season.

Furthermore, procurement of rabi onions for the 2024-25 season commenced earlier than usual, with a target of procuring 500,000 tonnes during the rabi season. Rabi onions, harvested from April to June, constitute a significant portion of India’s onion production and play a crucial role in meeting domestic demand until the Kharif crop is harvested later in the year.

India’s decision to permit limited onion exports to the UAE and Sri Lanka reflects a delicate balancing act aimed at managing domestic supply, stabilizing prices, and meeting international obligations amidst challenging market conditions. As the government continues to monitor onion availability and demand dynamics, regulatory measures will likely remain a key tool in ensuring food security and price stability in the domestic market.

India’s Policy Response

As India grapples with the intricacies of onion exports amidst domestic demand fluctuations and international market dynamics, the recent policy measures underscore the complexities inherent in managing agricultural trade. The decision to allow limited onion exports to the UAE and Sri Lanka while extending the ban domestically reflects India’s nuanced approach towards balancing conflicting interests of ensuring domestic availability and meeting international obligations.

The authorization of onion exports to specific destinations comes against the backdrop of stringent export regulations aimed at stabilizing domestic prices and safeguarding food security. The extension of the export ban until further notice highlights the government’s cautious approach in managing onion supplies amid uncertainties in production and consumption patterns.

India’s onion export policies have been subject to periodic revisions and adjustments in response to changing market conditions and socio-economic imperatives. The imposition of export duties and Minimum Export Prices (MEP) aims to curb speculative trading and ensure fair pricing in the domestic market. Additionally, exemptions for specific varieties like ‘Bangalore rose onion’ underscore the recognition of geographical indications and the promotion of niche agricultural products.

The role of buffer stocks in mitigating supply shortages and price volatility cannot be overstated. The expansion of buffer stock levels for the 2023-24 season reflects the government’s proactive stance in enhancing food security and stabilizing prices during lean periods. Moreover, the early procurement of rabi onions for the 2024-25 season signifies strategic planning to preempt potential supply disruptions and mitigate market uncertainties.

India’s approach towards onion exports encapsulates broader policy objectives of promoting agricultural sustainability, enhancing farmer livelihoods, and ensuring food security. By striking a delicate balance between domestic imperatives and international commitments, the government aims to foster a resilient agricultural sector capable of meeting diverse challenges and opportunities.

However, the efficacy of export regulations and buffer stock management hinges on effective implementation and monitoring mechanisms. Timely interventions, informed by real-time data and market intelligence, are essential to mitigate risks and capitalize on emerging opportunities in agricultural trade.

Moving forward, India’s onion export policies are likely to evolve in response to changing global market dynamics, climatic conditions, and technological advancements. Embracing digital solutions and supply chain innovations can enhance transparency, efficiency, and resilience in agricultural trade, thereby bolstering India’s position as a reliable supplier in the global marketplace.

Overall, India’s management of onion exports reflects a multifaceted approach that seeks to reconcile competing priorities of domestic food security and international trade obligations. While challenges persist, proactive policy measures, supported by robust institutional frameworks and stakeholder engagement, are critical in navigating the complexities of agricultural trade and fostering sustainable development. As India continues to navigate the intricacies of onion export management, the emphasis remains on fostering resilience, inclusivity, and innovation across the agricultural value chain to ensure the long-term prosperity of farmers and consumers alike.

The Central government has given its nod for the procurement of 1.39 lakh tonnes of Bengal gram (chana) from Karnataka during the 2023-24 rabi season under the Price Support Scheme (PSS), announced Union Minister Shobha Karandlaje on Thursday. Additionally, the Centre has disbursed the third instalment of Rs 235.14 crore under the Rashtriya Krishi Vikas Yojana (RKVY) to the Karnataka government for the fiscal year 2023-24. According to an official statement, the Agriculture Ministry’s approval for the procurement of Bengal gram in Karnataka under the PSS comes at a Minimum Support Price (MSP) of Rs 5,440 per quintal, with a maximum quantity of 1,39,740 tonnes earmarked for the Rabi season 2023-24.

In her remarks, Minister Karandlaje outlined that the released funds under the RKVY scheme will be allocated for various components aimed at bolstering agricultural infrastructure in the state. These components include the construction of godowns, water harvesting structures, primary demonstration units, procurement of agricultural machinery such as tractors, power tillers, and drones, as well as initiatives promoting integrated farming and soil health fertility.

Moreover, Minister Karandlaje highlighted that an additional allocation of Rs 178.65 crore was sanctioned to Karnataka on January 25 under the RKVY scheme. Consequently, the total allocation for the state under the RKVY scheme for the fiscal year 2023- 24 has been revised to Rs 761.89 crore, reflecting an increase from the initial allocation of Rs 583.24 crore. The statement further revealed that out of the total allocated amount, Rs 526.75 crore has been disbursed by the Centre thus far, with the remaining balance slated for release upon the utilization of the previously released funds by the state government.

Anita Praveen, the Secretary of the Ministry of Food Processing, emphasized the pivotal role of research and development (R&D) in propelling India’s food processing sector to greater heights. Speaking at the FICCI Scientific Symposium on ‘Processed Foods for Purpose,’ Praveen highlighted the sector’s significant potential for growth and its status as a priority area within India’s agricultural landscape.

Praveen stated, “The Indian agriculture sector is witnessing robust growth with record levels of production, and the Food Processing sector has become one of the priority sectors for growth.” She added, “We have already reached high levels of growth with the resources we have. There is a need now for the food processing sector with R&D as a focus for taking the sector to the next level.”

She underscored the pivotal role of the food processing sector in driving economic growth and generating employment opportunities, particularly for micro and small enterprises. “Food processing sector is one of the large investment generators, particularly for the micro and small sector, and has the potential to bring more private investments,” said Praveen. “With the resources at our disposal, we have achieved substantial growth. Now, the focus must shift towards leveraging R&D to propel the sector to new heights,” she remarked.

The Secretary outlined the strategic advantages of the food processing industry, citing abundant availability of raw materials at competitive prices and burgeoning consumer demand both domestically and internationally. “This sector has advantages of high raw materials availability at cheaper prices, high consumer demands both in domestic and international markets. This is the time to give a push to the food processing industry,” Praveen said.

Praveen also addressed the pressing issue of food wastage, emphasizing the need for comprehensive waste management strategies at every stage, from farm to fork. She stressed the importance of direct engagement between industry players, farmers, and micro-level processing units to enhance efficiency and minimize wastage.

“The time is right to bring these micro units and link them with large industries. The downward linkage approach will be advantageous for large industries to control quality, maintain standards, and have a sustained supply chain,” she added. “The industry should focus on educating the consumer, and we must adopt a balanced approach to this educational initiative. Consumers must know what they are consuming, and quality food production is the responsibility of the industry,” she added.

To boost exports, Praveen advocated for closer collaboration between large industries and smaller units, emphasizing the importance of quality control and maintaining robust supply chains. She highlighted the industry’s responsibility in consumer education, advocating for transparency and a balanced approach to fostering awareness about food quality and safety.

Siraj Hussain, Advisor to the FICCI Food Processing Committee and Former Secretary of the Ministry of Food Processing Industries, echoed Praveen’s sentiments, emphasizing the critical role of food processing in ensuring food safety and nutrition. “Food processing serves as a critical link between farm and fork. It acts as a catalyst for economic growth, generating employment opportunities and driving innovation across the food sector. The role of food processing in providing safe, healthy, and nutritious food has now taken center stage,” Hussain said. He underscored the sector’s potential as a driver of economic growth and innovation.

Sanjay Khajuria, president of CIFTI-FICCI and director, Corporate Affairs at Nestle India Ltd, hailed food processing as a ‘sunrise sector,’ lauding its progress in modernization and sustainable economic growth. “Food Processing sector is considered a sunrise sector and has achieved notable progress in terms of modernization and sustainable economic growth in recent years,” he said.

Dr. Seema Bathla, professor at the Centre for the Study of Regional Development, Jawaharlal Nehru University, highlighted the four key elements of the Indian agriculture food system: production, consumption, ecology, and environment. “The Indian agriculture food system has four key elements which include production, consumption, ecology, and environment,” she said.

With projections indicating an upward trend, India’s food processing sector’s output is expected to soar more than USD 600 billion by the fiscal year 2025-26.

Minister Mandaviya underscores India’s shift towards promoting alternative fertilisers for enhanced crop and soil health, alongside ensuring fertiliser availability in agriculture.

In a significant move towards bolstering domestic manufacturing and agricultural self-reliance, India is poised to halt urea imports by the end of 2025. Chemicals and Fertilisers Minister Mansukh Mandaviya announced this milestone, attributing it to a concerted push for domestic production, which has effectively bridged the gap between supply and demand.

Highlighting the pivotal role of fertilisers in Indian agriculture, Minister Mandaviya emphasized the government’s commitment to ensuring their availability. He noted that India has relied on chemical fertilisers for over six decades to augment crop production. However, in recent years, there has been a concerted effort to promote alternative fertilisers such as nano liquid urea and nano liquid di-ammonium phosphate (DAP), citing their benefits for crop and soil health.

Addressing concerns regarding achieving urea self-sufficiency, Mandaviya outlined the government’s dual strategy of reviving closed urea plants and expanding production capacities. He noted a substantial increase in domestic production capacities from 22.5 million tonnes in 2014-15 to around 31 million tonnes presently. Despite this progress, there remains a shortfall of approximately 4 million tonnes annually.

To address this gap, Mandaviya revealed plans to commission additional production facilities, aiming to reach an annual capacity of around 32.5 million tonnes. Moreover, the government aims to substitute 2-2.5 million tonnes of conventional urea with nano liquid urea, further bolstering domestic production.

The Minister expressed confidence in achieving the target by the end of 2025, effectively eliminating the need for urea imports and reducing the import bill to zero. Import figures have already shown a declining trend, dropping from 9.136 million tonnes in 2021-22 to 7.58 million tonnes in 2022-23.

Over the past decade, the government has prioritized ensuring an adequate supply of fertilisers while shielding farmers from volatile global prices through increased subsidies. Notably, the fertiliser subsidy for the fiscal year 2024-25 stands at Rs 1.64 trillion, demonstrating the government’s commitment to supporting agricultural productivity.

The transition to alternative fertilisers has gained momentum, with nano liquid urea witnessing increased demand. Cooperative organization IFFCO’s initiative in launching nano urea has been instrumental in this shift, with 70 million bottles sold between August 2021 and February 2024. Additionally, schemes like ‘PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth’ (PM-PRANAM) incentivize the adoption of alternative fertilisers and balanced usage of chemical fertilisers.

Underpinning these efforts are subsidy schemes like the Urea Subsidy Scheme (USS) and the Nutrient Based Subsidy Policy, ensuring affordability and accessibility of fertilisers for farmers. While urea imports are managed by the government, other fertilisers are imported under commercially viable terms.

With these strategic initiatives, India is on course to achieve urea self-sufficiency by 2025, marking a significant milestone in its agricultural journey towards self-reliance and sustainability.