Trust politicians to relive the Marie Antoinette moment every now and then. “Let them eat cake,” the Queen of France is said to have told her friends in 1789 upon learning that France was running out of bread. Folks may recall that as tomato prices soared in December 2003, General Musharraf had suggested the public to use something else in place of tomatoes. Not a bad suggestion at all, but the public took umbrage at being told of alternatives instead of seeing the government control the prices.
Now Dr. Hafeez Sheikh has made a faux pas of his own, caught in a bad moment telling the press that tomatoes were available at Rs17 per kg in the Karachi wholesale market. This able technocrat seemed to adhere to the “less is more” mantra when dealing with the press. But the good doctor’s offhand comment on tomato prices will define him for some time, just as Musharraf’s comment is still remembered by some.
But such comments are a side show. The main fumble is that the federal government did not foresee this tomato crisis coming, especially in the wake of the trade embargo with India that started in August earlier this year. People will make do somehow, by using curd, or yogurt or lemon to cook or tenderize or marinate their meat and vegetable dishes. But it is the shortage and over-pricing of everyday kitchen items that immediately relay to the public how out of touch priorities of any sitting government are.
The larger issue at hand is the abject market failure in the horticulture value chain, made worse by arbitrary attempts to control retail prices through magistrates and DCs. It all starts from the farms. After suffering from significant post-harvest losses, growers of fruits and vegetables typically receive a fraction of the lofty retail prices that are charged to voiceless urban consumers. The middle half of the value chain – dominated by crop contractors, credit-wielding middlemen, and large wholesalers – earns fat profits.
The element of “seasonality” in the absence of primary and secondary processing makes things worse every year. Tomatoes, for instance, aren’t grown all-round the year, and the sowing and harvest timelines also differ among the provinces, with Khyber Pakhtunkhwa as the major producer. As a result, wholesale and retail markets are flooded with the produce during the short harvest season, followed by a lull until another province’s crop becomes due in a month or so.
As prices crash in the season, it leaves the farmers especially worse off for another reason. In-season supplies from neighboring countries also add to the farmers’ ado, putting prices under further downward pressure just when the produce is hitting the market. Recall that just two months ago, tomato farmers in Qila Saifullah, Balochistan took to the roads and wasted hundreds of kilograms of the produce to protest against smuggling of tomatoes via Iran and Afghanistan.
There are deep structural issues in the value chain, but solutions are available. For instance, a case exists for large-scale “processing” of fruits and vegetables at the time of peak production. If enough primary processing facilities are based near the major production districts, there can be an increase in processing of tomatoes into puree, paste, pulp and sauces. These facilities can pick up excess produce, stabilize farmers’ prices, and provide off-season alternatives to consumers. This is one way to move the inefficient market forces towards the target of smoothing out supply and demand over the year.