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Indian subsidy on fruit and veg transportation if prices fall below threshold levels

The Indian federal government will provide 50% subsidy on the transportation of fruits and vegetables if prices fall below threshold levels, government officials have stated. “The subsidy is for storage and transportation of all fruits and vegetables where prices are below the average price or 15% lower than last year's prices,” said an official from the food processing ministry. “This will support farmer producer organisations, individual farmers and companies, who have lost business or seen poor returns for crops due to the coronavirus lockdown.”

States, farmer producer organisations, traders, farmers and companies will be able to use the scheme, for which guidelines will soon be issued, they said. It will be used for road, rail and air transportation. Telangana and Jammu & Kashmir have already sent proposals for transporting mangoes and cherries, the official said. The subsidy is part of the 'Atmanirbhar Bharat' economic package announced by finance minister Nirmala Sitharaman in May.

"This is going to be a six-month pilot. The food processing ministry will reimburse all the claims within two weeks. The state governments and other agencies will coordinate for this," said the official. He said the scheme will help farmers get a good price. The minimum distance between the centre of production and consumption will be 100 km. Most of the transportation of fruits and vegetables is by road and railways, while 1-2% is by air.

"The subsidy will give a big boost to domestic consumption and reduce dependence on imports," said Kaushal Khakhar, CEO of Kay Bee Exports. "This year, litchi from Patna to Mumbai by air cargo is of very good quality and readily available in the market compared to the previous year. We expect that the transportation subsidy, largely on air freight, will also encourage exports from non-traditional production areas." Khakhar said airlines will find this a good business opportunity.


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