 "Opening up")
The difference between model (wholesale) and retail prices of primary vegetables has widened during the past three weeks, with wholesalers allegedly taking undue advantage of demonetisation to exploit farmers.
Data compiled by the government-owned National Horticulture Board (NHB) showed a 63 per cent decline in brinjal round wholesale prices in Delhi's mandi since November 8 -- the day the note ban announcement made. The vegetable currently trades at Rs 325 a quintal. The price decline, however, was partly passed on to consumers in the retail markets. In Delhi, brinjal round price shed 32 per cent since November 8 to trade at Rs 1,500 a quintal on Friday. Similarly, cauliflower and cabbage prices have also fallen more in retail markets than in wholesale due to high margins maintained by retailers.
The current scenario, however, goes against the promises of the government, which ensures increasing income to farmers. Farmers bear the brunt of the losses, selling a number of vegetables in haste, amid fears of their remaining unsold and thereby adding to the cost incurred by farmer in the form of carryover.
"Wholesalers are paying farmers less deliberately, blaming inadequate availability of cash due to demonetisation. As a result, vegetable prices are falling in wholesale markets. But, there has been no government control over retail prices. Hence, retail prices have been ruling high as the decline in wholesale price is not fully passed on to consumers in retail markets. We have, therefore, urged the government to put a cap of 15-20 per cent on retail margins to make vegetables available cheaper for consumers," said Shri Ram Gadhave, President, Vegetables Grower Association of India (Pune, Maharashtra).
The similar trend has been seen in some vegetables in Maharashtra. The price of onion, for example, slumped by a staggering 19 per cent between November 8 (the day demonetization was announced) and December 2 to trade at Rs 650 a quintal in Vashi Agricultural Produce Market Committee (APMC). However, the crop continued to trade at Rs 1,500 a quintal in retail markets. The price of potato fresh was down 38 per cent in wholesale markets, trading at Rs 850 a quintal on December 2, but in retail, it shes just 25 per cent to Rs 1,500 a quintal.
"Green perishable vegetables are sold instantly and are treated differently than the ones that can be stored. There could be some transportation issues also," said a senior official of the Ministry of Food and Civil Supplies, Government of Maharashtra.
Meanwhile, according to another senior government official, cash flow for purchasing vegetables has not been an issue due to demonetisation of the high-value currency notes of Rs 500 and Rs 1,000. "Of the three basic needs -- food, clothing and shelter -- whatever one earns is spent first on ones livelihood. Hence, despite shortage of money consumers continued to purchase vegetables. Hence, the food chains continued to function," said the official.
Data compiled by the Ministry of Food, government of Maharashtra, showed a 35 per cent increase in vegetable arrivals in various mandis across the state between November 7 and December 2, diminishing the impact of demonetisation.
Meanwhile, farmers are getting paid through online transfer of funds from traders and wholesalers' account. Traders are also helping farmers open accounts so that they can issuing cheques to them and to buy vegetables on credit.
