Price Inflation is a serious
problem that affects the common man, especially when it results in an increase
in the price of essential commodities. An increase in the price of vegetables
affects the common man, the poor in particular. In absolute terms, the effect
of a rise in the price of vegetables will equally affect all classes of
society. However, when one considers this effect in relative terms, the poor
have to spend a disproportionate amount of their income on food. This leaves
them with very little money for other essential commodities and adversely
affects them in a manner unlike those experienced by the rich. This is a
well-known fact and controlling the price of essential commodities has been a
top priority of every government in power and plays an important role in the
political scenario. One such example is of the BJP government losing power in
the 1998 Delhi Assembly elections due to its inability to control the price of
onions.
Causes of vegetable price inflation
A
sudden increase in the price of vegetables can be due to the following reasons:
1.
Crop Failure
2.
Hoarding
3.
Supply-side infrastructural problems
4.
Transportation
a.
Increase in transport cost (Diesel price hike, tolls
on roads, etc.)
b.
Man-made factors (Strike, blockades, etc)
5.
Wastage of vegetables
a.
Absence of Cold Storage facilities
Crop Failure is an act of nature and the most that the government
can do is to make crop insurances affordable to ease the distress of the
farmers. This, however, shall not reduce the price of the vegetables. Hoarding,
on the other hand, can be easily tackled by stringent law enforcement. Problems
in transportation and wastage of vegetables can also be tackled by investment
in building the requisite supply-side infrastructure. Building cold storage
facilities will extensively improve the government’s ability to control prices
and help in reducing the wastage of food in the long run. Furthermore, granting
tax-breaks and subsidies, in addition to building better transportation infrastructure
shall also help.
A better way to tackle
Case
study on Amma Pannai Pasumai Nugarvor Kootturavu Kadai:
In
Tamil Nadu, the government recognized the problems associated with vegetable
price inflation, especially the impact that it has on the poor. In order to
tackle this problem, the government decided to build its own supply side
process and cater to the needs of the poor. Launched in Chennai, the Amma
Pannai Pasumai Nugarvor Kootturavu Kadai is a perfect example of a populist
scheme that also has an immense social impact. Run by the Triplicane Urban
Co-operative Society (TUCS), the Amma Vegetable Markets are a boon to the
poor. The USP of these shops is that the selling price of commodities is at par
with the procurement price from the farmers. This greatly benefited the poor
and is certainly worth reflecting in the entire nation.
