Understanding fresh produce supply chain dynamics and price wedges
Focusing on the sale of several staple vegetables at the Badami Bagh market in Pakistan, this study tracks price wedges from wholesale auctions to retail and consumer prices.
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Asad et al. Policy Brief September 2024.pdf
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- Sale of fresh produce from auction to retail involves margins retained by intermediary agents, potentially increasing the price paid by the final consumer.
- Evidence from previous research suggests that farmers receive only 57% of the auction price.
- Focusing on the sale of three staple vegetables – potatoes, onions, and tomatoes – at the Badami Bagh market in Pakistan, this study tracks price wedges from wholesale auctions to retail and consumer prices.
- Findings indicate a substantial wedge between the farmgate and final consumer prices, which can be explained by margins retained by wholesalers, bulk-breakers, and retailers.
- Reducing the storage and transportation costs of middlemen could potentially lead to lower final consumer prices.