The disparity between the wholesale and retail prices for essential vegetables, such as brinjal, cabbage, and cauliflower, went up beyond 53.3% from November 2015 to January 2016; an increase of 2.9% from the same period in the previous year.
According to ASSOCHAM’s latest report, the majority of Indian retailers are selling vegetables at prices which are significantly higher than the wholesale price index (WPI). Normally, the difference between WSP and retail prices on an average stays around 30%, but it has significantly increased in the past few months.
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 report 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.
As per the findings, the price discrimination between retail and wholesale divided into three important categories. The first category is below 30% which represents the normal case.
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.
Because of the 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.
ASSOCHAM has asked the government to play a crucial role in protecting the producers’ interests, such as improving existing infrastructure facilities, especially in the cold storage department, and encourage public private partnerships to generate capital.
“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 Sunil Kanoria, the president of ASSOCHAM.
The government should also ensure stability in the pricing of farm products during the peak seasons through a clear and transparent pricing policy, and also has to play a crucial role in protecting the producers’ interest through strict action against middlemen and black marketers.
Ensuring the easy availability of good quality seeds, instituting crop insurance and extending credit facilities to farmers as also must dos for the government. 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.