Fruit and Vegetable Marketing and its Efficiency in India: A Study of Wholesale Markets in the Ahmedabad

Vasant P. Gandhi and Namboodiri N V

No WP2002-12-05, IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: There has been great concern in recent years regarding the efficiency of marketing of fruits and vegetables in India. It is believed that poor efficiency in the marketing channels and poor marketing infrastructure leading to high and fluctuating consumer prices and only a small portion of the consumer rupee reaching the producer farmers. This paper examines these aspects in regulated wholesale markets for fruits and vegetables in Ahmedabad City area. These regulated markets were established to improve the marketing efficiency. The system of sale followed in these markets indicated that open auction as a system of sale is yet to take roots in these markets and the marketing system was dominated by open auction or secret bidding resulting to significant erosion of marketing efficiency. Analysis of marketing costs indicated that on an average they hover around 8 percent of the consumer price for vegetables 11 to 15 percent for fruits. On an average the share of farmers in consumer rupee was hardly 48 percent for vegetables and 37 percent for fruits. The study suggests that regulated wholesale markets can help in improving the marketing efficiency by promoting direct contact with the farmers, increasing the number of buyers and sellers in the market, promoting open auction system of marketing and strengthening or introducing facilities and services such as go-down, cold storage, transparency and access to internal and external market environment.

Date: 2002-12-05
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