Why prices of tomato and onion keep fluctuating

Seasonal, as well as shock components, contribute to the spikes of tomato and onion prices, and requires policy attention, the Economic Survey 2021-22 said.

Seasonality in prices results from seasonal production patterns, it said.

"Strategies to incentivise production during lean season should be designed. Investments in processing of surplus production of tomato, and processing and storage infrastructure of onion must be promoted. Cutting wastage of the production, better supply chain management will also help in meeting the demand," said the Survey, tabled in Parliament by Union Finance Minister Nirmala Sitharaman on Monday,

The Survey noted that the government is implementing various measures to overcome these challenges.

Also read: Economic Survey 2022: Key takeaways from PEA's speech

According to it, the mission for 'Integrated Development of Horticulture' (MIDH) envisages holistic development of horticulture and provides assistance at 50 per cent of total cost of Rs 1.75 lakh per unit for low-cost onion storage structure having a capacity of 25 tonne each.

"Government also procures onions directly from farmers at farm gate prices for the buffer."

Besides, the Centre runs other schemes such as 'Agricultural Marketing Infrastructure' (AMI) for rural warehouses which enables small farmers to enhance their holding capacity to sell their produce at remunerative prices and avoid distress sale and "Operation Greens" for integrated development of 'Tomato, Onion and Potato' (TOP) value chain.

"It provides 50 per cent subsidy for the transportation and storage from surplus producing areas to consuming centres."

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