The difference between the wholesale (WSP) and retail prices of vegetables for 2013-14 has gone up beyond 49 per cent.
This was stated in a paper titled ‘Vegetables Wholesale and Retail Price Discrepancy’, by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
It underscored the widening gap between the prices at which procurement is done from farmers and the price level for consumers.
The paper added that the majority of Indian retailers were selling vegetables at prices which were significantly higher than the wholesale price index (WPI).
Normally, the difference between the WSP and retail price, on an average, stays around 30 per cent. However, it has been much higher, as seen in the findings of paper.
Commenting on ASSOCHAM’s findings, its secretary general, D S Rawat said, “WSP benefited middlemen and traders multiple times, particularly for sale of essential commodities.”
“In the process, the worst hit remained farmers and consumers. The former’s margins were squeezed badly, and the latter paid unreasonably higher prices,” he added.
Due to the differences in both prices of wholesale and retail prices, the extra amount that end consumers pay for vegetables is utterly disproportionate.
The study considered nearly 33 market centres in India, including Abohar, Agra, Ahmadabad, Amritsar, Bangalore, Baraut, Bhopal, Bhubaneshwar, Chandigarh, Chennai, Dehradun, Delhi, Gangatok, Guwahati, Hyderabad, Jaipur, Jammu, Kanpur, Kolkata, Lucknow, Mumbai, Nagpur, Nashik, Patna, Pimpalgaon, Pune, Raipur, Ranchi, Shimla, Surat and Thiruvananthapuram.
The study revealed that most of the centres have recorded the huge discrimination between the wholesale and retail prices. It added that out of the 33 centres, nearly 18 centres are charging more than the all-India average wholesale and retail price. The retail prices are over and above 85 per cent to the wholesale prices.
It added that in Category-III, the centres where the retail price of vegetables is more than 50 per cent of the wholesale prices in top centres include Amritsar (120.5 per cent), followed by Abohar (107.4 per cent), Agra (90.2 per cent), Nagpur (82.8 per cent), Ahemdabad (69.4 per cent), Delhi (68.9 per cent), Chandigarh (68.5 per cent), Dehradun (67.4 per cent), Jaipur (64.6 per cent) and Mumbai (63.5 per cent).
In Category-II, the retail prices of vegetables range between 30 and 50 per cent of the wholesale prices in top ten centres, include Surat (49.7 per cent), followed by Lucknow (48.5 per cent), Shimla (37.9 per cent), Jammu (37.5 per cent), Chennai (34.6 per cent) and Guwahati (33.7 per cent).
As per the ASSOCHAM findings, the price discrimination between retail and wholesale divided into three important categories. The first category is below 30 per cent, which represents normal case. The Category-II and Category-III indicate more than normal range of price discrimination and abnormal price discrimination, respectively.
“In the recent past, inflation has been a major concern for the policymakers. In both levels of prices (consumer price and wholesale price), the rate of inflation has been very high, especially in the case consumer price inflation. It has been around ten per cent, except the fourth quarter of 2013-14,” said Rawat.
“The essential vegetables incorporated in the paper are bitter gourd, brinjal (long), brinjal (round), cabbage, cauliflower, garlic, ginger, chilly, okra, onion, peas, potato (fresh), potato store, tomato (hybrid and local),” the study added.
ASSOCHAM urged the government to play a very crucial role to protect the producer’s interest; improve infrastructure facility by encouraging the public-private partnership (PPP) initiative for the development of cold storage units, and provide facilities to those farmers who are from long-distance areas.
Grading of vegetables is another challenge that farmers are facing, therefore government should initiate grading training for farmers through workshop and also encourage non-governmental organisations’ (NGO) participation.
On the retail front, the analysis observed that retailers were charging very high prices as compared to wholesale prices of the vegetables. “In such scenario, the government was urged to play a proactive role to control the retail price through the surveillance scheme,” the paper added.
