Date:04/08/2007 URL: http://www.thehindubusinessline.com/2007/08/04/stories/2007080450341400.htm

Back Cities consume Rs 60,000-cr fruits, vegetables annually

Sudhanshu Ranade

Chennai, Aug. 3 Indian cities consume fruits and vegetables worth Rs 60,000 crore a year. Trade and transport margins being around 45 per cent.

Total consumption of fruits and vegetables in rural as well as urban areas has increased over the past five years from Rs 1,37,000 crore in 2000-01 to Rs 1,84,000 crore in 2005-06. But cereal consumption did not increase.

Population went up by 260 million, but cereal consumption dropped by 14 per cent.

Declining per capita cereal consumption in both rural and urban areas is one reason for this decline. The phenomenon is not new; it has been under way for decades. There is a difference of opinion on why this is happening; no consensus has yet emerged.

However, it is known that the drawdown of stocks is an important reason for the apparent decline in cereal consumption.

Reason

Despite prices of fruits and vegetables rising by 37 per cent and that of cereals by 7.4 per cent, consumption of fruits and vegetables went up 50 per cent higher. Consumption of cereal increased only 7.4 per cent over the period, according to the wholesale price index. So, consumption at current prices skyrocketed even though there was no increase at all in the production of fruits and vegetables in quantitative terms.

According to the National Sample Survey (NSS) on Consumption Expenditure in 2004-05 consumption of fruits and vegetables, at Rs 67,000 crore, was 60 per cent below the figure reported in the National Account Statistics (NAS). However, for the past 30 years figures reported by NSS have been well below figures reported in the National Accounts Statistics.

One reason for this is that NSS data fail to adequately capture consumption data of middle and upper income groups. NSS data on consumption expenditure of the poor are more reliable than data on total consumption. For this, it is safer to stick to NAS figures, which, however, do not give a break-up for rural and urban areas.

So NAS levels need to juxtaposed with the NSS break-up, and this is what has been done in the accompanying table.