August 1, 2017
Md Nadimul Haque makes a Special Mention on the impact of demonetisation and of flood on tomato prices
Tomato is a household staple without which no meal is usually complete. Especially, during the month of shravan, many Indian communities throughout the country avoid onion and garlic and rely mostly on tomato. Despite a good monsoon season, tomato prices have escalated to Rs 60-80 per kg in retail markets across the country.
The major concern for this rise is attributed to ‘note bandi’, that is, demonetisation. Demonetisation came on top of a bumper autumn/kharif crop. Earlier in November, when demonetisation was rolled out, tomato prices were as low as Rs 2 or 4 per kg. Since the farmers were unable to recover money by summer, they terminated the crop, the impact of which is being felt now. Farmers, therefore, were inclined to plant less tomato in summer 2017. As a result, the early part of summer saw very low prices, which were followed by an unusual spike.
Consumers are feeling the brunt of demonetisation now, even after a good monsoon. Because of the flood-prone areas of West Bengal (Purulia) and the Jhalawar and Jaipur-Chomu belt in Rajasthan, many other crops have also been destroyed. Demonetisation, along with heavy flooding, has resulted in the rise of tomato prices which needs to be seen to immediately by the Central Government. The inconvenience and the long-run costs to the economy need to be raised as both food output and consumption are affected.