New Delhi: The central government is set to introduce a ₹2,000 crore initiative aimed at creating horticulture clusters for fruits and vegetables within 100 km of major consumption areas. Officials believe shorter supply routes will ease food inflation and boost farmer earnings, according to two sources familiar with the plan.
Guidelines for the scheme have been completed, and a pre-bid meeting with stakeholders has taken place. The five-year central sector programme, called Peri-Urban Vegetable Clusters, will permit private firms, farmer producer organisations and cooperatives to establish these clusters.
The project seeks to enhance availability of perishable goods by cutting transport distances, lowering costs and minimising post-harvest losses. Vegetables and pulses make up 6.82% of the Consumer Price Index, while fruits and nuts account for 3.70%, so disruptions in these areas strongly affect food prices.
National inflation reached an 18-month peak of 4.4% in June, up 50 basis points from the prior month due to higher food costs.
Rollout will occur in stages. Phase one targets state capitals and cities with at least 1.5 million residents based on the 2011 Census. Later phases will cover cities above one million people, then those up to one million.
The approach offers benefits to both farmers and consumers by reducing losses and freight expenses, enabling production aligned with demand, and delivering fresher items to buyers while improving returns for growers, noted agriculture economist Shweta Saini.
Officials expect the clusters to strengthen farm-to-market connections, refine logistics, stabilise seasonal prices and widen market access for producers.
The Agriculture Ministry stated the scheme will tackle low price realisation through better practices, quality planting material, modern technologies such as IoT, traceability and precision farming.
Horticulture output is forecast to reach 377.77 million tonnes in 2025-26, a rise of seven million tonnes from the previous year. Fruit production should increase to 121.4 million tonnes and vegetable output to 221 million tonnes.
Despite higher production, supply chain gaps have caused sharp price swings in cities including Delhi-NCR, Mumbai, Kolkata, Bengaluru, Hyderabad, Pune and Chennai, especially for tomatoes, potatoes and onions.
Logistics represent 15-20% of input costs for fruits and vegetables because growing areas are often distant from markets, leading to waste from unpredictable output, according to transport expert S.P. Singh.
