A Study on the Economic Gap between Farm Gate Prices and Urban Retail Costs at Katasvan (Village), Vyara, Tapi

Abstract

Agriculture continues to serve as the cornerstone of India’s rural economy, yet farmers frequently experience a disproportionate share of returns compared to the retail prices paid by urban consumers. This study investigates the economic gap between farm gate prices and urban retail costs for key agricultural commodities—tomato, onion, potato, brinjal, and chilli—in Katasvan village (Vyara Taluka, Tapi District, Gujarat). The research employs both primary and secondary data, integrating direct farmer surveys with urban market price observations for the year 2022–2023. Descriptive and comparative analyses reveal significant disparities between farm gate and retail prices, ranging from 110% to 280%, primarily driven by multi-layered intermediaries, inadequate storage, and limited direct marketing access. The findings highlight the urgent need for policy interventions, such as strengthening Farmer-Producer Organisations (FPOs), enhancing digital market linkages, and expanding cold-chain infrastructure to ensure fair price realisation. The study contributes to the discourse on rural economic sustainability by offering insights into price transmission mechanisms and value-chain inefficiencies in India’s agricultural markets.