You You will definitely be surprised after knowing the answer to this question, out of the price at which vegetables are bought in the vegetable market, how much money does the farmer who grows that vegetable get? Yes, a research paper by the Reserve Bank of India (RBI) states that onion farmers get only 36 percent of the customers’ expenses. Whereas for tomato it is 33 percent and in case of potato it is 37 percent. That means if you are buying onion worth Rs 100, farmers get only Rs 36, for tomato worth Rs 100, only Rs 33 and for potato worth Rs 100, only Rs 37.
Suggestions for improvement in agricultural marketing sector
To improve this situation, reforms in the agricultural marketing sector have been suggested in the research paper of RBI. This includes increasing the number of private mandis to help farmers get better prices for their produce. The study paper on vegetable inflation regarding prices of tomatoes, onions and potatoes says, “Since vegetables are perishable items, the number of private mandis has been increased to improve transparency in marketing of tomatoes, onions and potatoes.” can be increased. Competition can also help in improving the infrastructure of local level agricultural produce market committees.
Food inflation is the biggest reason behind gross inflation.
Food inflation has been cited as the main reason for the recent pressure in gross inflation. In this, huge fluctuations in the prices of tomato, onion and potato have been the most challenging. The research paper has been prepared jointly by the staff of the Department of Economic Research (DEPR) and outside authors. The researchers found that e-National Agricultural Markets (e-NAM) should be leveraged to help reduce existing shortcomings in markets. This will increase the prices farmers receive for their produce, while on the other hand, the prices paid by consumers will reduce.
Advocating starting futures trading for crops
The research paper talks about promoting farmer produce organizations in the case of tomato, onion and potato. Along with this, it has been advocated to start futures trading in onion, especially for the winter crop. This will help in optimal price discovery and risk management. In this, suggestions have been given regarding storage, processing and methods of increasing the productivity of these vegetables.
