Government subsidized tomatoes being availed by 7% of households surveyed however 82% still paid over INR 100/kg in their most recent purchase; 15% have stopped buying tomatoes

July 19, 2023, New Delhi: Central government intervention since July 14th through the National Cooperative Consumers' Federation of India (NCCF) and National Agricultural Cooperative Marketing Federation of India (NAFED) is an attempt to cool tomato prices in several cities. Trucks and vans are being used to sell this much in demand but scarce vegetable at a subsidized price of INR 80-90/kg in these locations. “There has been a decrease in the wholesale prices of tomatoes due to the intervention of the Government to sell it at a concessional rate of INR 90 per kg, at several locations in the country where the prices were ruling exceptionally high,” an official government statement on July 16 stated.

After a re-assessment of the situation in over 500 points in the country, the official statement stated that it was decided to sell tomatoes at INR 80 per kg from July 16th. So far sales have started at several points each in Delhi, NOIDA, Lucknow, Kanpur, Varanasi, Patna, Muzaffarpur and Arrah through NAFED and NCCF. After assessing the situation, the central government is planning to start selling tomatoes in more cities “depending upon the prevailing market prices at such locations”, according to the official statement.

The Centre is subsidising tomatoes by more than 30% from the prevailing market rates to provide relief to the consumers, NCCF Managing Director Anice Joseph Chandra told PTI. The two cooperative bodies entrusted with the procurement and sale of tomatoes are buying supplies from Madanapalli (Andhra Pradesh), Kolar (Karnataka) and Sanganeri (Maharashtra). NCCF plans to sell about 20,000 kg of tomatoes per day, raising it to 40,000 kg per day as the sale picks up.

Tomato prices normally rise sharply during the monsoon months as the production is low and they get easily damaged. This year early rains in May followed by heavy showers during monsoon from June as also delayed rains in some parts of the country has led to supply disruption leading to low arrivals in wholesale markets and consequent sharp rise in the rates. While the government has arranged for the supply of subsidized tomatoes to the common man, not many seem aware of where it is available, there are many others who may not make the effort to go to the supply vans and queue up to buy tomatoes in sufficient quantities to last for a few days.

LocalCircles through yet another survey has strived to find out how many households are benefitting from the central government intervention as the subsidised tomatoes are only available in a handful of cities so far. The survey received over 10,000 responses from household consumers located in 304 districts of India. 61% respondents were men while 39% respondents were women. 46% respondents were from tier 1, 33% from tier 2 and 21% respondents were from tier 3, 4 and rural districts.

85% of respondents stated that they did purchase tomatoes in the last week

The survey first sought to know what percentage of the households that purchased tomatoes before the prices started escalating were still doing so. It asked them, “Did you purchase tomatoes in the last one week?” An overwhelming 85% out of 10,985 respondents stated that they did purchase tomatoes in the last week while 15% indicated that they have stopped purchasing tomatoes lately, suggesting that the prevailing market prices are still unaffordable for many households.

7% of respondents indicated that they got government subsided tomatoes at INR 80-90 /kg while 82% still paid over INR 100/kg in their recent purchase

The survey next sought to know from those households that bought tomatoes in last one week about the price they paid in their recent purchase and whether they were able to avail of the subsidized tomatoes made available by the Government via NCCF and NAFED. It asked them “What best describes the price for tomatoes that your household paid most recently?” This query received 9,337 responses with just 7% of respondents indicating that they got government subsided tomatoes at INR 80-90 /kg. Of the remaining, 45% indicated that they last paid INR 100-150/ kg; 25% of households surveyed paid INR 150-200/ kg; 7% paid INR 200-250/kg; and 5% paid over INR 250/kg. However, 7% of respondents paid under INR 100/kg and 4% did not give a clear response.

Slight reduction in prices observed as 82% of households surveyed paid over INR 100/kg as opposed to 87% who did last week

A comparison of the surveys done since June 27 shows that while 18% had indicated that they were paying over INR 100/ kg for purchasing tomatoes in late June, by July 14 the percentage had shot up to 87%. Now due to government intervention, the latest survey shows that there has been marginal relief with 82% of households surveyed having to pay over INR 100/kg for tomatoes.

In summary, the central government intervention to reduce tomato prices has made some impact with 7% households buying tomatoes through that channel. However, 82% households are still paying over INR 100/kg for tomatoes. It must also be noted that these are only the households that are still buying tomatoes despite the high prices. There are about 15% households who were earlier buying tomatoes but with the rising prices are unable to afford them. The wholesale price data does indicate a 30% reduction in tomato prices at the wholesale level but the same is yet to translate to price reduction at the retail levels. As of July 18th, most online platforms show tomatoes priced between INR 130-230/kg. So, for now if the Government wants that prices for consumers stay low, it may have to expand its subsidized tomato sales program to many more cities and districts and even evaluate import of tomatoes till the supply situation normalizes.