Middlemen benefit most from huge cost disparity for Indian vegetables

By RJ Whitehead

- Last updated on GMT

Photo: iStock
Photo: iStock

Related tags: Marketing

The gulf between wholesale and retail prices for vegetables continues to increase far beyond traditional Indian levels, according to an Assocham study.

The majority of Indian retailers are currently selling vegetables like brinjal, cabbage and cauliflower for significantly higher prices than the wholesale price index, the industry body revealed in a report.

It found that the price disparity for essential vegetable had increased to 53.3% between November 2015 and January this year. Traditionally, the difference between wholesale and retail prices is around 30%, the report added. 

The study looked at nearly 28 market centres across india, and found that most of these were charging far more than the overall average Indian retail and wholesale prices.

Retailers in Hyderabad were charging an average of 132.3% over the wholesale price, followed by Mumbai (94.7%), Ahmedabad (92.5%), Amritsar (91.4%) and Delhi (86.3%).

Assocham cites middlemen and traders as the beneficiaries of profiteering, while farmers and consumers were the hardest hit. 

The government, it said, needed to control retail prices and protect producers’ interests by improving infrastructure and encouraging public-private partnerships to develop cold storage facilities. 

Easy availability of good quality seeds, crop insurance and credit facility also needs to be focused upon​,” said Sunil Kanoria, Assocham’s president. 

Providing low-cost of credit to marginal farmers and also providing tax-free incentives for technology upgrades for essential agricultural equipment is also required. The Government also needs to review the transportation policy to reduce the cost push factors of vegetables​.”

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