11.06.2013

As inefficient as the system might be, average food mileages in India are small, compared to the European Union or North America (see Table above). Tomatoes easily travel more than 800 kilometres in Europe, but not more than 160 kilometres in India. So it is not excessive food mileage, nor exorbitant transport costs, that are to blame for the high markups.

Let’s have a look at the following example: One of the low-cost and high-volume items is tomatoes, with their market price fluctuating between 10 and 50 Rupees (Rs) per kg. Producer prices range at 60 per cent of the retail price. Tomatoes are graded on the farm, packed in boxes and taken to the local Agricultural Produce Market Committee (APMC) for auctioning to traders under the supervision of the commission agent. No further processing takes place until delivery to a retailer in the city.