Lessons from past experiences in regulating the fruits market for Nowruz holidays

Every year, as the end of the year approaches, in an effort to calm the market, agricultural market regulators announce their plans to regulate the Eid market. But various obstacles and factors, including weakness in the distribution network's information system of the country and some atmospheric factors, as well as natural disasters and managerial problems, have sometimes raised difficulties and despite announcement of procurement programs and stockpiling tons of fruits, some recent market regulation programs have not been fully realized due to some executive discrepancies, thereby leading to an increase in the prices of fruits and vegetables in the early days of the year. A brief review of the reasons given by the authorities for non-fulfillment of these promises, including the inconsistencies and also diagnosis of these factors will prevent the possibility of its recurrence. In analyzing the reasons for the increase in prices in late March and early April of previous years, the following factors need to be addressed: 1- Closing fruit and vegetable markets during the Nowruz holidays, 2- Traffic bans on trucks carrying goods in some routes by the police, 3- Lack of effective supervision and Lack of price tags, 4- Inaccurate timing and possible miscalculations at the time of harvest by producers and time of purchase by suppliers. 5. The type of consumer behavior and expectations resulting from fears of repeating the same experience in past years and the influx of people into the fruit market before the start of the project on Eid night (due to lack of complete information and media market regulation program, at least a few weeks before the New Year), 6- Problems caused by not providing the necessary funds at the time set for purchase by the Plan and Budget Organization or the Central Bank, 7- Problems of sorting, vaxing, timely replacement of packaging and transportation or timely emptying of fruit from the cold storage warehous 8- untimely and insufficient import of some alternative imported fruits, 9- More profitability of fruit exports due to exchange rate changes, 10- Lack of balance in the purchase price of domestic cautionary reserve with the same daily export price of fruit, 11 - Lack of monitoring over the quality of fruit purchased in the shopping malls and sometimes depriving people of confidence in the quality and price of fruit market regulation; 12 - shortcomings in the Nowruz fruit distribution basket, including tangerines; 13 - Frequent changes and shifts in the organization of relevant institutions due to consecutive mergers and acquisitions, and finally the lack of continuity and intensification of monitoring on quality and prices are mentioned in March and April and several other factors.

Key Points

Due to the existence or persistence of some of the above-mentioned factors and the possibility of some of these discrepancies in this year's Eid, it is suggested that the Ministries of Industry, Mines and Trade and Agriculture- Jahad, in cooperation with other executive and supervisory organizations, take action to eliminate the causes of these discrepancies:

  1. Considering the adequacy of the production of apples and oranges in 1398 by the Ministry of Agriculture- Jahad (3.85 million tons of apples and 3.17 million tons of oranges), which has increased significantly compared to 1397, it is necessary for market regulators to provide sufficient information. In this regard, they should take the initiative and focus on improving the quality of purchased fruit. This will help secure consumer trust and encourages them to buy high quality products and thereby reducing the problems associated with rising fruit waste and avoiding related financial problems.
  2. Considering the expansion of fruit and vegetable markets in Tehran and the fact that these fields play the role of reference and price leadership in Tehran and sometimes the country, and on the other hand, considering the significant share of Tehran in the volume of transactions and purchases, it can be said that the prices of goods and commodities in Tehran mainly play a reference or determining role for prices in the country, so it is suggested that those in charge of market regulation and the Ministry of Industry, Mine and Trade, in cooperation with Tehran Municipality and Fruit and Vegetable Markets Organization, pay special attention to solve the problems of fruit and vegetable fields located in Tehran as well as other cities.
  3. With a little planning and coordination, it is possible to prevent the general closure of fruit and vegetable stalls during the Eid holidays, and in the provisions of the stallholders' contract with the municipality, the stallholders shall be obliged not to close during Nowruz days and Nowruz shifts (for example, with incentive payments to workers). This will help prevent the closure of the fruit markets and thus avoids any possible distortions in the distribution of agricultural products.
  4. In order to strike a balance between the purchasing price of domestic cautionary reserves and the daily export price of the same fruit, it is necessary to make various arrangements, including: imposing compensatory duties on exports (in a short and definite period of time) and replacing domestic crops shortages with timely and limited import of some substitute imported fruits.
  5. It is suggested that the timing for the start of the Eid fruit supply program be set within one week to 10 days before Eid and be continued until 21 of April to reduce and avoid the influx of customers (which might occur due to expectations of possible lower supply) or an increase in prices.
  6. It is obvious that each of the reasons mentioned by different officials in the past years as a factor leading to an increase the prices of Nowruz days, has played a different role in this phenomenon, some of which playing a major and decisive role and some playing a complementary role in increasing prices. The main reason for the imbalance in the fruit market may be the lack of coordination and proper planning or delays in delivering quality goods from farms and warehouses to retail stores. Therefore, the emphasis of the Ministry of Industry, Mine and Trade in the executive programs of Eid market regulation should be on timely, sufficient, appropriate and quality supply of fruits, because the closure of fruit and vegetable fields can only play a complementary in increasing prices.
  7. According to the annual procedure, although the police do not put a ban on trucks carrying food, fuel and perishable products, this factor cannot be considered as the main factor driving the sharp increase in prices but only as a secondary factor of imbalance and lack of supply. In this regard, with a little coordination with the police, this shortcoming can be solved. Therefore, it is suggested that a separate schedule be developed for each province and the relevant transportation hubs be determined and announced in coordination with the police.
  8. price instability and the closure of fruit and vegetable markets during Nowruz, as well as the reduction of price tags by unions and some retailers, paves the way for abuses and overcharging, sometimes in the absence of Nowruz observers. So the issue of monitoring and installation is also important. The possibility of markets or sample booths during Nowruz will be a great assistance to proper supply and stability of prices in Nowruz. Therefore, it is suggested that special and honorary headquarters of control for labeling prices be widely established and reconstructed.
  9. Considering that this year the Ministry of Industry, Mine and Trade is in charge of the market regulation program (especially Eid night fruit), it is recommended that the representatives of the Ministry of Agriculture- Jahad,  Rural Cooperatives Organization and relevant authorities transfer their previous and current executive experience to market regulation authorities.
  10. The Ministry of Industry, Mine and Trade shall, in cooperation with the Ministry of Agriculture- Jahad and the Rural Cooperative Organization, increase the participation of agricultural unions in the private sector in the Nowruz fruit market regulation program and in general, and the regulation of the agricultural market be handed over to them.
  11. Timely provision of the required Rial and foreign currency credits and timely allocation by the relevant authorities for the timely fulfillment of obligations, including purchases in Rial and foreign exchange through timely approval by the Cabinet, is the utmost necessity for the fulfillment of the market regulation program.
  12. providing Information on the coordination of timely harvesting and packaging of agricultural products by the Ministry of Jihad Agriculture and coordination of timely clearance of products (from warehouses and customs) by the relevant organizations in order to deliver them to the retail stores as well as coordination with the police is possible through the above-mentioned solutions (especially paragraphs 2 to 8).
  13. It is obvious that the combined policy of determining and reducing seasonal fruit tariffs, along with determining the quota and also timely provision of information on the amount of production and import and proper implementation of monitoring of distribution channels, will play a decisive role in regulating the goods market and also prevents excessive stockpiling of perishable goods, both in the market and in warehouses.
  14. Planning and determining a specific province to create a regional and periodic balance in areas that are suffering from short supply or surplus in reserves.
  15. The performance of Nowruz Fruit Market Regulation Program and the level of effective supervision over its quality, distribution and price is the first condition to encourage people to welcome this program and to deter fruit wastage while the second condition is media coverage of this program.
  16. Islamic Republic of Iran Broadcasting information program can help calm the market, reassure people of sufficient quantity and inform them of the approved prices (before Nowruz), prepare various reports from fruit orchards to the sorting and cold storage process and coordination with the police, announce the distribution channels and sales centers, emphasize the need to include price tags, and emphasize the persistence of the program until late April, and so on.
  17. The components of increasing production capacity, coordination in timely supply of goods, strengthening supervision and mechanization of distribution channels, as well as timely and sufficient use of import leverage should be the focus of relevant ministries in charge of market regulation.

Final note: Timely, intelligent and non-passive market forecasting by obtaining market information with a systematic digital mechanism, as well as monitoring the distribution bases using new technologies by monitoring information from production and distribution unions and chain stores, by requiring all major retailers to use these mechanized technologies (weighing, distribution and sales poses), will have a significant impact on solving the country's basic and overall distribution problems in the coming years.

Obviously, in case of fulfillment of the above conditions, especially using the capacity of the private sector in purchasing and storage operations, timely provision of financial resources required by the government, inter-agency coordination and finally informing and implementing it properly will encourage people to join this program.


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