Sunday, June 24, 2012

The reintroduction of the Crate rule – is only one reason

It was barely two months ago when the farmers were screaming blue murder that they had surplus vegetables that they could not sell. Tomato was rotting on the trees too costly to pluck. Now tomato is Rs300/kg at retail! So what gives?

Tomato was always transported in boxes to prevent being squashed so the crate law does not impact them differently. It is purely a question of good weather which brought a bumper crop, and farmers stopped growing tomato as it was not worth their while and hey presto there is a shortage, coupled with the drought that has intensified the problem. It helps to be contrary, as those people who were able using greenhouses to grow tomato expecting the shortage and price rises are making hay. However one can probably count the number of people in this fortunate state on the fingers on one hand, there are so few who took advantage.

That particular circumstance aside, there is a huge debate going on as to why there is such a massive fluctuation in vegetable prices, which are not always exactly predictable, year on year. The crate issue is not the main reason. After all only a total of 25 fruit and vegetables require to be transported by crates. That is peanuts in comparison to over 100 varieties.

Many of the price increases are on vegetables that do not even require crates, though obviously there is an added cost involved in crate transport, not covered by lower post harvest losses. Ironically due to the political sensitivity of the farm lobby, the crate law does not apply farmers. That at a stroke reduces the benefit of the crate law in the first place as there is a substantial loss in transport from the farm gate to the main wholesalers at Economic Zones where they are first transported to.

In today’s context the drought is bigger factor, as it is across the country and not restricted to an area. The only people likely to benefit from this are people who were able to grow vegetables in their home gardens, use available water from home wells to grow their vegetables for home consumption and therefore save on market prices, which mean they will now be able to eat, that which they were priced out of. Good for them!

It is clear that farmers have not been able to weather proof their production, and due to lower yields will not benefit from price increases.

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