Centre plans ₹2,000 crore horticulture clusters to tame food inflation
New Delhi: The Centre is preparing to roll out a ₹2,000 crore scheme to develop horticulture clusters for fruits and vegetables within a 100-km radius
New Delhi: The Centre is preparing to roll out a ₹2,000 crore scheme to develop horticulture clusters for fruits and vegetables within a 100-km radius of major consumption centres, betting that shorter supply chains will help curb food inflation while improving farmers' incomes, according to two people aware of the development. The government has finalized the scheme guidelines and recently held a pre-bid meeting with interested stakeholders. The proposed Peri-Urban Vegetable Clusters, a five-year central sector scheme, will allow private players, farmer producer organizations (FPOs) and cooperatives to develop the clusters, the people said. Also Read | Ample fertilizer stocks cushion India against war-driven supply risks The initiative aims to improve the availability of perishable produce by shortening supply chains, reducing transportation costs and cutting post-harvest losses. Vegetables and pulses account for 6.82% of the Consumer Price Index (CPI 2024), while fruits and nuts carry a weight of 3.70%, making supply disruptions in these categories a key driver of food inflation.
India's headline inflation accelerated to an 18-month high of 4.4% in June, rising 50 basis points from the previous month as food inflation surprised on the upside. The scheme will be rolled out in phases. The first phase will cover state capitals and cities with populations of 1.5 million or more, based on the 2011 Census. The second will extend to cities with populations exceeding 1 million, followed by cities with populations of up to 1 million, according to one of the two people cited above. The supply chain gap “It is a win-win for both farmers and consumers…Bringing production centres closer to consumption centres will reduce post-harvest losses and freight costs, improve demand-linked production, and ensure consumers get fresher produce while farmers realise better returns,” said Shweta Saini, agriculture economist and founder and chief executive of Delhi-based Arcus Policy Research. The government expects the cluster-based approach to strengthen farm-to-market linkages, improve logistics, moderate seasonal price volatility and expand farmers' market access.
Also Read | PLI success prompts Centre to explore next phase for food processing sector Responding to emailed queries, the Ministry of Agriculture and Farmers Welfare said: "The scheme will comprehensively address farmer's issues pertaining to poor realization of prices through multiple interventions including but not limited to the promotion of good agricultural practices (GAPs), facilitating the availability of quality planting material of new and improved cultivars, incentivising the use of modern technologies including IoT (Internet of Things), Traceability solutions, precision farming and others." Production rise expected Horticulture production is projected to have hit 377.77 million tonnes in 2025-26, up by 7 million tonnes from 2024-25, according to the ministry's second advance estimates released on 11 June. Fruit production is expected to rise from 117.6 million tonnes to 121.4 million tonnes, led by higher output of banana, mango, papaya, apple and guava. Vegetable production is projected to increase from 217.8 million tonnes to 221 million tonnes. “This increased level of fruit and vegetable production has unfortunately not been matched by developments in supply chain management.
The BriefWire