A recent study by the Reserve Bank of India (RBI) reveals that farmers receive just one-third of what consumers pay for key vegetables and fruits, with wholesalers and retailers capturing the rest. For vegetables such as tomatoes, onions, and potatoes (TOP), farmers earn 33% to 37% of the consumer price. The situation is similar for fruits, with farmers getting 31% of the price for bananas, 35% for grapes, and 43% for mangoes in the domestic market.
The study points out that unlike sectors such as dairy, where farmers receive around 70% of the consumer price, vegetable and fruit farmers face lower returns due to inefficiencies in the supply chain. Perishable crops, inadequate storage, and multiple intermediaries all contribute to this gap.
The COVID-19 pandemic exposed these issues, particularly during harvest seasons, when farmers often had to sell their produce at distress prices or discard them. Meanwhile, consumers face inflated prices during off-seasons, creating a boom-and-bust cycle for these essential crops.
The RBI report emphasizes the need for investment in agricultural infrastructure, such as better storage facilities, logistics, and research to improve crop yields. It also highlights the importance of policy reforms to streamline the supply chain, reduce intermediaries, and improve market access for farmers. Addressing these challenges would ensure that farmers receive a fairer share of the consumer price and stabilise the market for both producers and buyers.
