Vikas Kumar and Abhishek Kumar find out an unholy nexus of mandi traders, commission agents and retailers at work
Indian’s billion-plus people are wondering if prices of essential food items will fall. Though neoclassical economics seek to explain the rising prices in terms of rise in demand and fall in supply, it is not reason enough for people like Rageshwari, a receptionist in a small private firm with monthly take home salary of Rs 10,000. She had gone to the local bazaar to find one kg of cauliflower selling at Rs 22. Thousands of commoners are affected, they feel helpless.
Team TSI went on an early morning fact-finding mission in the wholesale mandis of Delhi. Cauliflower was selling at the rate of Rs four to six a kg there. In retail, the same thing was selling at Rs 20 to 25 per kg. The story was pretty much the same for potato, onion and coriander.
A walk in Azadpur Mandi in Delhi, one of the biggest wholesale markets of fruits and vegetables, is not the most enchanting experience but it opens one’s eyes. Here one comes face to face with reality, the murky world of arhatias, commission agents and traders who are ready to take hapless farmers for a ride. No market theory can explain this phenomenon.
Commission agents and traders lead the pack but the local sabziwallah has joined the bandwagon too. Believe it or not, in certain categories of vegetables, their margin of profit has touched 300-400 per cent.
Wholesale prices have dropped to a fraction of what they were at the beginning of the year, but there is hardly any decline in retail prices. You might find it difficult to digest but you are ending up paying three to four times the mandi price.
Wholesale rates at present are actually at the lowest as compared to the past few months due to continuous downward trend since December 2009 and there is reportedly no shortage of any vegetable. Devinder Sharma, noted agriculture expert, says, “I don’t think food inflation will ebb after April of this year. In the days to come, we will first see the impact on prices of the Budget decision to hike duties on fuel. In the past few days, the price of 500 gram of curd in Mother Dairy has gone up by Rs two and that of cheese by Rs four.”
Some believe that the April harvest would impact the price of food items. The pressure on inflation will ease after the new crop flows into the markets. But those who believe in this are actually living in the fool’s paradise. Sharma explains why this is not feasible,“Fertiliser manufacturers have promised not to raise the price of other fertilisers besides urea in Kharif 2010, but once the monsoon season is over, they will be a given free hand in deciding the prices. That is where the fertiliser manufacturers are waiting to make a killing. This will have a cascading effect on food prices...”
Indian’s billion-plus people are wondering if prices of essential food items will fall. Though neoclassical economics seek to explain the rising prices in terms of rise in demand and fall in supply, it is not reason enough for people like Rageshwari, a receptionist in a small private firm with monthly take home salary of Rs 10,000. She had gone to the local bazaar to find one kg of cauliflower selling at Rs 22. Thousands of commoners are affected, they feel helpless.
Team TSI went on an early morning fact-finding mission in the wholesale mandis of Delhi. Cauliflower was selling at the rate of Rs four to six a kg there. In retail, the same thing was selling at Rs 20 to 25 per kg. The story was pretty much the same for potato, onion and coriander.
A walk in Azadpur Mandi in Delhi, one of the biggest wholesale markets of fruits and vegetables, is not the most enchanting experience but it opens one’s eyes. Here one comes face to face with reality, the murky world of arhatias, commission agents and traders who are ready to take hapless farmers for a ride. No market theory can explain this phenomenon.
Commission agents and traders lead the pack but the local sabziwallah has joined the bandwagon too. Believe it or not, in certain categories of vegetables, their margin of profit has touched 300-400 per cent.
Wholesale prices have dropped to a fraction of what they were at the beginning of the year, but there is hardly any decline in retail prices. You might find it difficult to digest but you are ending up paying three to four times the mandi price.
Wholesale rates at present are actually at the lowest as compared to the past few months due to continuous downward trend since December 2009 and there is reportedly no shortage of any vegetable. Devinder Sharma, noted agriculture expert, says, “I don’t think food inflation will ebb after April of this year. In the days to come, we will first see the impact on prices of the Budget decision to hike duties on fuel. In the past few days, the price of 500 gram of curd in Mother Dairy has gone up by Rs two and that of cheese by Rs four.”
Some believe that the April harvest would impact the price of food items. The pressure on inflation will ease after the new crop flows into the markets. But those who believe in this are actually living in the fool’s paradise. Sharma explains why this is not feasible,“Fertiliser manufacturers have promised not to raise the price of other fertilisers besides urea in Kharif 2010, but once the monsoon season is over, they will be a given free hand in deciding the prices. That is where the fertiliser manufacturers are waiting to make a killing. This will have a cascading effect on food prices...”
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