Indian farmers only earn one third of the final price for fruits and vegetables in the supply chain. Notably, most of the profit margins are absorbed by middlemen who are mostly wholesalers and retailers. In the case of vegetables like tomatoes, onions, and potatoes commonly referred to as TOP, prices tend to rise at least twice in a year. More than that, the growers do not seem to benefit from even threefold or more earnings due to such price spikes.
In fact, a study co-authored by agriculture economist Ashok Gulati further reveals that farmers get about 33% of the consumer price for fruits and vegetables like tomatoes, 36% for onions, and 37% for potatoes.
For fruits, farmers earn a number of 31% of the final price for bananas, 35% for grapes in the domestic market, and 43% for mangoes in the domestic market. In the export markets, it is a different ball game with farmers getting more money for mangoes but less for grapes even as prices are higher.
Indian farmers struggle to earn bread and butter: Low price for fruits and vegetables
There is thus a methodological gap regarding the understanding of the structure, organization, and sources of supply of existing APMC markets vis-a-vis private mandis. Given these challenges, the study suggests several measures.
These include expansion in private mandis, greater use of the e-NAM platform, and formation of farmer collectives for better bargaining power. The report also recommends futures trading be restarted in agricultural products to enhance stability in prices, increase cold storage, promote solar-based storage solutions, and expand capacity in food processing.
A portion of these measures will help the government stabilize prices, improve farmer incomes, and reduce the disparity in the fruits and vegetable supply chain. These benefits would not only accrue to farmers but also lead to a more stable and affordable food supply for consumers.
Also, see: Cost of Indian veg thali rises by 11%, big relief for non-veg thali eaters
