Agriculture

Retailers selling vegetables at higher prices than wholesalers ASSOCHAM

Majority of Indian retailers are selling vegetables at prices which are significantly higher than the wholesale price index
Retailers selling vegetables at higher prices than wholesalers ASSOCHAM

Disparity between Wholesale Price (WSP) and Retail prices for essential vegetables like brinjal, cabbage, cauliflower went up beyond 53.3% during November 2015 to January 2016 which was 50.4% as compared to the same period last year, according to ASSOCHAM recent paper.

Majority of Indian retailers are selling vegetables at prices which are significantly higher than the wholesale price index (WPI), reveals the ASSOCHAM latest study on “Vegetables Wholesale and Retail Price Discrepancy: 2016”. Normally, the difference between WSP and retail prices on an average stays around 30% but it has been much more as seen in the findings of paper.

The study has considered nearly 28 market centers in India including Ahmedabad, Amritsar, Bangalore, Bhopal, Bhubaneshwar, Chandigarh, Chennai, Dehradun, Delhi, Gangatok, Guwahati, Hyderabad, Jaipur, Jammu, Kolkata, Lasalgaon, Lucknow, Mumbai, Nagpur, Nasik, Patna, Pimpalgaon, Pune, Raipur, Ranchi, Shimla, Srinagar and Trivendrum.

The study reveals that most of centers that have recorded huge discrimination between the wholesale prices and retails prices, out of 28 centers, nearly 11 centers are charging more than all India average retail prices and wholesale prices, adds the paper. The retail prices are over and above 53.3% to the wholesale prices during November 2015 to January 2016.

It further points out, In category-III, the retail prices of vegetables charging more than 50% of the wholesale prices in top centers include Hyderabad (132.3%) followed by Mumbai (94.7%), Ahmedabad (92.5%), Amritsar (91.4%), Delhi (86.3%), Dehradun (84.5%), Chandigarh (84.1%), Kolkata (74.4%), Patna (65%) and Ranchi (62.1%).

In category-II, the retail prices of vegetables ranges from 30-50% of the wholesale prices gap increased in four centers include Jammu which has increased from 32.7% to 48.1% followed by Bhopal has increased from 21.7% to 44.9%, Lasalgaon gap has increased from 28.4% to 44% and Lucknow gap has also increased from 39.9% to 41.2%.

As per the ASSOCHAM findings, the price discrimination between retail and wholesale divided into three important categories. The first category is below 30% which represents normal case. The category-II and category-III indicate more than normal range of price discrimination and abnormal price discrimination respectively.

Wholesale price have benefited multiple times middlemen and traders, particularly for sale of essential commodities and worst hit in the process remained farmer and consumer as farmers margins squeezed badly with consumers paying unreasonably higher prices. Due to difference in both prices of wholesale and retail prices, the extra amount which end consumers are paying for vegetables is utterly disproportionate, adds the findings of the paper.

In the recent past, inflation has been a major concern for the policy makers. Both level of prices “consumer price and wholesale price” inflation has been very high especially in the case consumer price inflation.

The essential vegetables incorporated in the study are brinjal long, brinjal round, Cabbage, Cauliflower, Garlic, Ginger, Chilly, Okra, Onion, Peas, Potato fresh, Potato store, Tomato hybrid and Tomato local, highlights the paper.

ASSOCHAM urges government needs to play very crucial role to protect the producer interest. Improve infrastructure facility through encourage public private partnership (PPP) initiate for the development of cold storage and facility should be provided those farmers which are coming from the long distance area. Grading of vegetable is another challenge that farmers are facing, therefore government should initiate grading training for farmers through workshop and also encourage NGOs participation, said Mr. Sunil Kanoria, President ASSOCHAM.

On the retail front, the analysis has observed that retailers are charging very high prices as compared to wholesale prices of the vegetables. In such scenario, government needs to play proactive role to control the retail price through surveillance scheme, adds the paper.

The government must ensure stability in the pricing of farm products during the peak seasons through clear & transparent pricing policy and also needs to play very crucial role to protect the producer interest through strict action against the middleman and black marketers.

Grading of vegetables is another challenge that farmers are facing, therefore government should initiate grading training for farmers through workshops and also encourage NGOs participation, adds the paper.

Easy availability of good quality seeds, crop insurance and credit facility needs to be focused upon. Providing low cost of credit to marginal farmers and also providing tax free incentive for technology up-gradation for essential agricultural equipment is also required, highlights the study. The Government also needs to review the transportation policy to reduce the cost push factors of vegetables. 

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