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Price Gap Between Retail and Wholesale Vegetables Beyond 49%: Assocham


The difference between the wholesale (WSP) and retail prices of vegetables for 2013-14 has gone up beyond 49%, according to a paper titled ‘Vegetables Wholesale and Retail Price Discrepancy’ brought out by Assocham. Majority of the retailers were selling vegetables at prices significantly higher than the wholesale price index (WPI), and there was a widening gap between prices at which procurement is done from farmers and the price level for consumers. Normally, the difference between the WSP and retail price, on an average, is around 30%.

Said Assocham’s Secretary General, D S Rawat, “The WSP benefited middlemen and traders multiple times, particularly for sale of essential commodities. In the process, the worst hit remained the farmers and the consumers. The former’s margins were squeezed badly, and the latter paid unreasonably higher prices.”

Due to the differences in the prices of wholesale and retail prices, consumers bore the  extra amount which was very disproportionate. As per the report, the price discrimination is divided into three categories. The first is below 30%, Category-II indicates more than normal range of price discrimination, and III abnormal price discrimination.

The study considered around 33 market centres including Abohar, Agra, Ahmedabad, 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. Most of the centres recorded a huge price difference between wholesale and retail.

Nearly 18 centres are charging more than the all-India average wholesale and retail price. The retail prices are over and above 85% to the wholesale prices. In Category-III, the centres where the retail price of vegetables is more than 50% of the wholesale prices include Amritsar (120.5%), Abohar (107.4%), Agra (90.2%), Nagpur (82.8%), Ahmedabad (69.4%), Delhi (68.9%), Chandigarh (68.5%), Dehradun (67.4%), Jaipur (64.6%) and Mumbai (63.5%).

In Category-II, the retail prices of vegetables range between 30 and 50% of the wholesale prices in top 10 centres, namely Surat (49.7%), Lucknow (48.5%), Shimla (37.9%), Jammu (37.5%), Chennai (34.6%) and Guwahati (33.7%). “In the recent past, inflation has been a major concern for policymakers; the rate of inflation has been very high, especially in the case of consumer price inflation. It has been around 10%, except in the fourth quarter of 2013-14,” said Rawat.

Assocham urged the government to protect the producer’s interest; encourage PPP initiative for development of cold storage units, provide facilities to farmers who are from long-distance areas, initiate grading training for farmers through workshops, and  encourage NGO participation. In light of the fact that retailers were charging very high prices as compared to wholesale prices, the government was urged to play a proactive role to control the retail price through the surveillance scheme.