Here's why you are paying triple for tomatoes

Aug 29, 2012, 06:49 IST | Saurabh Katkurwar

With no one to regulate rates, retailers reap huge profits by hiking prices rampantly, while farmers are paid peanuts; experts demand price monitoring cell

If you like tomatoes enough to pay Rs 30-Rs 40 per kg at retail markets then you might be interested in knowing how egotistic retailers are ruining your salad days.

Tomatoes at the APMC market, Vashi
Playing catch-up: Tomatoes at the APMC market, Vashi. File pic 

Sample this: the same fruit is available for Rs 15-22 for a kilogram at Agricultural Produce Market Committee (APMC) mart. Representatives here say they attempt to keep prices of products reasonable at the wholesale market by ensuring sufficient supply from various parts of the country. However, costs of goods remain high at retail markets since there is no regulation on rates.

For instance, yesterday, a bag with 10 kg of tomatoes was available between Rs 80 and 140 (or Rs 8 to 14 a kg) at APMC market. When any retailer/vendor purchases tomatoes from here, he is expected to pay an additional Rs 2 to 3 for transportation and a similar amount for weighing, municipality and labour charges. So, his total expenses on one kilogram of tomatoes come to Rs 21. However, while selling, he adds another Rs 10-20 to this.

You say tomato...
“We try our best to control prices of fruits and vegetables at APMC market by ensuring optimum supply from across the country. In fact, prices of some products have gone down in the last few days. Surprisingly, in retail, rates of fruits and vegetables have largely remained unchanged, and have gone up in certain cases. However, we cannot rein in prices in the pen market,” said Sudhir Tungar, secretary of Mumbai APMC.

Vendors in retail markets, however, defended their huge margins claiming they have to compensate for damages during transportation. “Although we buy fruits and vegetables at almost half of our selling price, we try to earn maximum profits to compensate for the merchandise that gets damaged during haulage or gets spoilt because of the perishable nature of the commodities. If some fruits and vegetables do not get sold in a day or two, they go to waste. We also have to pay fees to various authorities to ensure smooth running of our business. So, though our profit margin appears enormous, the reality is different,” said a retailer at Dadar.

Buyers in the soup
Since dynamics of demand and supply decide rates of fruits and vegetables, authorities have expressed helplessness to control prices by bringing in regulation. Dr Kishor Toshniwal, managing director of Maharashtra State Agriculture Marketing Board (MSAMB), said “It is difficult to restrain prices of fruits and vegetables by ushering in any regulation since the whole business is based on demand and supply.

We are still trying to restrict rates by taking some measures like direct marketing. A group of farmers, who harvest the same fruit or vegetable, would be allowed to sell the product directly in retail. That will help in bringing down prices.”

On other hand, experts criticised the state government for failing to set up a price monitoring cell that helps in checking unnecessary hike in costs of essential commodities.

“Unlike the central government, Maharashtra does not have a price monitoring cell, which is helpful in keeping rates of vital produce in check. Middlemen, transporters and retailers are reaping huge profits while farmers are getting peanuts. Authorities cannot wash their hands off the problem; they will have to intervene to ensure that common people are not cheated by vendors,” said Shirish Deshpande, a consumer rights activist.  

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