India’s retail inflation continued its rise in September to a five-month high of 7.41% year-on-year, driven by surging food prices, according to the data released by the National Statistics Office on October 12th. Inflation in the food basket, which currently has 50% share in the retail inflation, rose to 8.60% in September as against 7.62% in the previous month. The erratic and unseasonal rains have led to further rise in prices of vegetables, cereals and pulses. This scenario continued in October, with only prices of select vegetables softening in some parts of the country, where they are grown, compared to last month.
As the vegetable prices soar once again, the consumer is left wondering what to leave out of the daily diet as even rice, pulses and milk continue to put a squeeze on household budgets. With thousands of posts and comments received from household consumers across the nation about higher prices of vegetables, LocalCircles conducted a pan-India survey which received over 22,000 responses from household consumers located in 307 districts of India. 63% of the respondents were men while 37% were women. 42% respondents were from tier 1, 33% from tier 2 and 25% respondents were from tier 3, 4 and rural districts.
76% households surveyed say monthly expenditure on vegetables has increased by over 25-100% in the last 2 years
The first survey question asked respondents “How much has your monthly household expenditure on vegetables changed from 2020 to 2022?” The findings revealed that 36% households are now spending 25-50% more to buy vegetables; 31% of the respondents put the increased expenditure to 50-100% and 9% to over 100% increase. Unless it is locally grown, vegetable prices vary according to the distance it has to be transported from the farm to the market as the transportation costs get added. Thus, the price of the same vegetable can vary from district to district. The locality where the vegetable is bought from also influences the price and quality of the produce as it is dictated by the buyers. The survey question, which received 9,803 responses, revealed that while 4% felt the prices had risen only up to 10% and 16% felt the prices had risen by 10-25%, there was no one who was not impacted, though 4% of the respondents gave no clear indication.
1 in 2 households surveyed say on average they paid more than INR 50/kg for tomato, INR 30/kg for Onion and INR 25/kg for potato this year
To understand the prices paid in 2022 for vegetables like tomato, onion and potato, the survey asked household consumers, “What best describes the per kilogram price that your household paid on average for tomato, onion and potato this year” 27% of the respondents said they bought tomato for INR 60 or higher, onion INR 35 or higher and potato INR 30 or higher. Of the total 12,563 respondents to the question, 23% revealed that they have paid INR 50-60 for tomato, INR 30-35 for onion, INR 25-30 for potato. Another 7% respondents bought tomato for INR 40-50, onion INR 25-30 and potato INR 20-25; in addition, 20% paid less for tomato INR 40 or lower, onion INR 25 or lower, and potato INR 20 or lower. The survey had a large segment of 23% respondents who did not give any clear answer. On an aggregate basis, 50% households said on average they paid more than INR 50/kg for tomato, INR 30/kg for Onion and INR 25/kg for potato this year.
As per the data released by the National Statistical Office (NSO), inflation in the food basket was 7.62% in August 2022, up from 6.69% in July 2022 and 3.11% in August 2021. On an annual basis, the vegetable price rise was reported more than 10%. However, what household consumers are reporting in the survey is considerably higher than that.
In summary, as the survey reveals, the majority of the households (76%) are paying 25% or higher price for vegetables than in 2020 with 40% of the 76% saying their monthly expenditure on vegetables has risen by over 50% in the last 2 years. While there are influencing factors like extended monsoon, pest problems, water logging, etc., which impact production and availability, it is time for forward thinking by the policy makers as this problem of shortage and price rise during the monsoon and immediately after if the crops are damaged, has become quite the norm. There is also the problem of farmers having to pay much more to reach the mandis or other sale points as transportation costs have increased from what they were in 2020. The policy makers must also put themselves in the shoes of the consumer and work on creating mechanisms where annual transportation cost increase from farms to mandis has a ceiling. While new technology and ecommerce-based platforms have emerged in the last 5 years supplying vegetables to doorstep, none of them has been able to lower the cost for the end consumer by making the farm to fork supply chain more efficient.
The survey received responses from over 22,000 household consumers located in over 307 districts of the country. 63% respondents were men while 37% respondents were women. 42% respondents were from tier 1, 33% from tier 2 and 25% respondents were from tier 3, 4 and rural districts. The survey was conducted via LocalCircles platform and all participants were validated citizens who had to be registered with LocalCircles to participate in this survey.
LocalCircles, India’s leading Community Social Media platform enables citizens and small businesses to escalate issues for policy and enforcement interventions and enables Government to make policies that are citizen and small business centric. LocalCircles is also India’s # 1 pollster on issues of governance, public and consumer interest. More about LocalCircles can be found on https://www.localcircles.com