 "Farmers get a third of what you pay for veggies, middlemen and retailers pocket the rest: RBI study")
Farmers in India are getting only about a third of the final selling price of vegetables and fruits, in contrast to other sectors, a series of research papers published by the Reserve Bank of India (RBI) on food inflation highlighted.
The RBI working paper that studies the price dynamics of tomato, onion and potato (TOP) in India said that two-third of what consumers pay to purchase fruits and vegetables from the market are pocketed by wholesalers and retailers.
The share of farmers in the consumer rupee is estimated around 33 per cent for tomato, 36 per cent for onion and 37 per cent for potato, the study stated.
As for fruits, the RBI paper estimates farmers’ share in the consumer rupee to be 31 per cent for bananas, 35 per cent for grapes and 43 per cent for mangoes in the domestic value chain.
In the export market, the share for mangoes increases, but the share for grapes drops, even though the overall price is higher.
The RBI studies, however, pointed out that unlike cereals and dairy products, where procurement and marketing are relatively developed, TOP vegetables lack an efficient value chain system.
Impact Shorts
More ShortsIn the dairy sector, farmers have been getting around 70 per cent of the final price.
As per the study, producers of egg appear to be best positioned, getting 75 per cent of the final price, while for poultry meat, farmers and aggregators together account for 56 per cent of the final price.
Assessing the value chains of pulses, the study estimated that approximately 75 per cent of the consumer rupee spent on gram (chana) goes to farmers, while the share is around 70 per cent for moong and 65 per cent for tur.
The RBI highlighted that while cereals and dairy products, where procurement and marketing are relatively developed, TOP vegetables lack an efficient value chain system.
It is largely due to the perishable nature of the crop, regional and seasonal concentration, lack of adequate storage facilities, and presence of a large number of intermediaries.
Co-authored by agriculture economist Ashok Gulati, the study also said that forecasting price spikes is possible through a “balance sheet approach”.
The papers also suggested several methods by which policymakers can smooth out these price spikes.
To restrict the spike in TOP price, the study recommended expanding private mandis, leveraging e-NAM, promoting farmer collectives, and relaunching futures trading. It also suggests building more cold storage facilities, promoting solar-powered storage, increasing processing capacity, and raising consumer awareness on processed TOP products.
Similar recommendations have been made for fruits and include improving the supply chain with better storage and transport, promoting different fruit varieties, offering crop insurance, expanding processing and exports, adjusting import duties to match demand, and using digital tools to track supply and reduce price swings.
With inputs from agencies.
 "Russian drones over Poland: Trump’s tepid reaction a wake-up call for Nato?")
 "As Russia pushes east, Ukraine faces mounting pressure to defend its heartland")
 "Why Mossad was not on board with Israel’s strike on Hamas in Qatar")
 "Turkey: Erdogan's police arrest opposition mayor Hasan Mutlu, dozens officials in corruption probe")
 "Russian drones over Poland: Trump’s tepid reaction a wake-up call for Nato?")
 "As Russia pushes east, Ukraine faces mounting pressure to defend its heartland")
 "Why Mossad was not on board with Israel’s strike on Hamas in Qatar")
 "Turkey: Erdogan's police arrest opposition mayor Hasan Mutlu, dozens officials in corruption probe")
